What are ETF funds?

Investment funds ETF

ETF funds are investment funds whose units are listed on the stock exchange. ETF funds are also called passive funds because they are meant to mimic the index.

Often, a special sector index is created for the fund. Fund by buying shares that are part of the index has the ability to imitate the index results.

Funds can also invest in futures, such funds are burdened at the expense of rolling contracts and this is called contango.

Information on the issuer of the ETF fund

Before you invest in an ETF, you should first become familiar with how it works. ETF funds are funds where all information is public.

Also on the issuer side of the fund will find information such as: what is the total commission of the fund, what specific assets invest the fund, what are its goals, what are its results so far.

If we know the fund abbreviation eg EEM, we type in the web search engine: eem etf. We receive the results and go to the website of the issuer of the iShares fund - a brand owned by BlackRock.

Fund: iShares MSCI Emerging Markets ETF (EEM) is a fund investing in developing countries. Fund units are listed on the Arca NYSE and are available through the DIF Freedom platform. The annual cost of managing the fund is 0.72% and the cost is included in the unit price.

This fund invests in 23.58% in China, 15.34% in South Korea, 12.39% in Taiwan, etc. Percentage is invested in the following shares: Taiwan Semiconductor Manufacturing 3.35%, Samsung Electronics LTD 3.34%, China Mobile 1 , 86% etc. The fund maps the results of the index of large and medium-sized companies in Emerging Markets.

Assets in management are: $ 23,550,602,724.00. Year of foundation on 7 April 2003 And much more information, brochure, etc.

Account currency

The vast majority of ETFs are denominated in dollars and these funds are also the most liquid. Therefore, when investing in ETF funds, it is recommended to open an investment account in dollars too.

Types of ETF funds

There are leveraged ETF funds, and in their name they also have `` x2``, `` x3``. Funds such map the selected index and then the result is multiplied by 2, or respectively by 3. You can earn more here, but you also have to remember that you can also lose more quickly.

There are inverted funds, such funds make it on the downturn, such funds have in the names: Short, Bearish, Short, UltraShort. So, for example, the SHORT S & P500 SH fund is an inverted fund on the US stock index S & P500. And if the S & P500 index will lose value, the investment in the fund will be profitable and vice versa.

The division of the fund due to the assets of which the result and reflect, and so we have equity funds, bond funds, raw materials funds, currencies, real estate and actively managed funds.