Common Questions about ETFs
Q: Are ETFs guaranteed or insured?
The government agency, The Depository Trust Clearing Corporation, which ensures stock certificates are delivered to the person who bought them also, makes sure all ETF certificates in a trade are assigned correctly. Furthermore the SEC examines all applications to create an ETF. Risk of abuse is very low.
Q: Are ETFs only for stocks?
No. A liquid asset of any class with a published index can turned into an ETF. There are ETFs for Bonds, Real Estate, Precious Metals, Basic Material, Emerging Markets, Japanese Futures, Top Latin 50, Foreign Currency, Commodities, and many others.
Q: Do other countries also have ETFs?
Of course there are. Countries in Europe and across the Pacific Rim have funds including most developed countries. As other countries gain political and economic stability they will surely adopt ETFs.
Q: Do any ETFs actually beat the market?
Actively managed funds currently beat the market by 2 or 3xs. Actively managed funds are operationally much harder to manage. It is, however, much easier to build an ETF when all participants in that process know the details of where stocks are being invested. It is in the nature of actively managed funds to be secretive in order to avoid eager parasitical resellers.
Q: Are there ETFs for the Dow Jones Industrials or S&P 500?
Of course, there are several different funds that track these indexes. It's important to keep in mind the S&P and Dow Jones stay in tact as their own indexes, and more than one fund can track an index through that fund groups license. Pick the fund, open up an account with a broker and start trading.
Q: Could ETFs possibly be a fly-by-the-night trend or fad?
This is highly unlikely. At years end 2009 assets of exchange traded funds totaled $656.91 billion. In fact year over year during the past several years they have had steady growth with no decline. Much faster than traditional mutual funds. - 23218
The government agency, The Depository Trust Clearing Corporation, which ensures stock certificates are delivered to the person who bought them also, makes sure all ETF certificates in a trade are assigned correctly. Furthermore the SEC examines all applications to create an ETF. Risk of abuse is very low.
Q: Are ETFs only for stocks?
No. A liquid asset of any class with a published index can turned into an ETF. There are ETFs for Bonds, Real Estate, Precious Metals, Basic Material, Emerging Markets, Japanese Futures, Top Latin 50, Foreign Currency, Commodities, and many others.
Q: Do other countries also have ETFs?
Of course there are. Countries in Europe and across the Pacific Rim have funds including most developed countries. As other countries gain political and economic stability they will surely adopt ETFs.
Q: Do any ETFs actually beat the market?
Actively managed funds currently beat the market by 2 or 3xs. Actively managed funds are operationally much harder to manage. It is, however, much easier to build an ETF when all participants in that process know the details of where stocks are being invested. It is in the nature of actively managed funds to be secretive in order to avoid eager parasitical resellers.
Q: Are there ETFs for the Dow Jones Industrials or S&P 500?
Of course, there are several different funds that track these indexes. It's important to keep in mind the S&P and Dow Jones stay in tact as their own indexes, and more than one fund can track an index through that fund groups license. Pick the fund, open up an account with a broker and start trading.
Q: Could ETFs possibly be a fly-by-the-night trend or fad?
This is highly unlikely. At years end 2009 assets of exchange traded funds totaled $656.91 billion. In fact year over year during the past several years they have had steady growth with no decline. Much faster than traditional mutual funds. - 23218
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Black Sand trading is an online stock trading tool that indicates to online traders where and how to invest their money. Black Sand's clients have consistently achieved a 53% or greater ROI over the past seven years following Black Sand's signal. For more information about trading and using Black Sand Trading visit our website.
posted by X - Men @ 4:34 AM
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