Common Questions about ETFs
Q: Are ETFs guaranteed or insured?
The Depository Clearing Corporation, a government agency, which ensure sock certificates purchased are delivered to the purchaser and assigned to the same. Anytime a new ETF is created, the SEC is sure to review and examine every application. Chances of abuse have been very low.
Q: Are ETFs only for stocks?
No, they are very innovative and versatile. In fact, any liquid asset with a published index can be an ETF. There are ETFs for Bonds, Commodities, Emerging Market, Japanese Futures, Latin Top 50, Precious Metals, Basic Materials, Real Estate and a long list of others.
Q: Are there international ETFs?
Yes there are. Most developed countries have them including countries in Europe and across the Pacific Rim. ETFs will gain popularity in most countries in the world as there is greater economic and political stability.
Q: Do any ETFs try to beat the market?
Currently actively managed funds are beating the market by 2 to 3xs. Operationally, these funds are much harder to manager. When building an ETF of this type it's much easier to make sure all players are aware of where stocks are being invested. Traditionally these funds are secretive, mainly to protect themselves from 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?
That is highly doubtful. Assets of ETFs totaled $656.91 billion by the end of 2009. During the past several years there has been a steady growth in ETFs with no decline. Traditional mutual funds haven't seen near the same growth. - 23211
The Depository Clearing Corporation, a government agency, which ensure sock certificates purchased are delivered to the purchaser and assigned to the same. Anytime a new ETF is created, the SEC is sure to review and examine every application. Chances of abuse have been very low.
Q: Are ETFs only for stocks?
No, they are very innovative and versatile. In fact, any liquid asset with a published index can be an ETF. There are ETFs for Bonds, Commodities, Emerging Market, Japanese Futures, Latin Top 50, Precious Metals, Basic Materials, Real Estate and a long list of others.
Q: Are there international ETFs?
Yes there are. Most developed countries have them including countries in Europe and across the Pacific Rim. ETFs will gain popularity in most countries in the world as there is greater economic and political stability.
Q: Do any ETFs try to beat the market?
Currently actively managed funds are beating the market by 2 to 3xs. Operationally, these funds are much harder to manager. When building an ETF of this type it's much easier to make sure all players are aware of where stocks are being invested. Traditionally these funds are secretive, mainly to protect themselves from 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?
That is highly doubtful. Assets of ETFs totaled $656.91 billion by the end of 2009. During the past several years there has been a steady growth in ETFs with no decline. Traditional mutual funds haven't seen near the same growth. - 23211
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posted by X - Men @ 4:44 AM
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