ETF - entire financial world in one tool!
What is an ETF?
ETF or stock investment fund - this is a trading instrument whose popularity is growing with unprecedented speed in the financial world. ETF trading is trading on the stock exchange just like regular stock trading yet it's properties resembles a mutual or mutual funds (PIF). If you need a tool to access virtually any stock market in the world, to replenish trading ideas and greater diversification, you might want to turn your attention to the ETF.
How does the ETF work?
As already mentioned, an ETF by its structure is very similar to a mutual fund or, as usual for us, the PIF. What is a Mutual Fund? This fund, managed by professionals who invest their capital in various securities (shares, bonds, etc.). Anyone who wants to give their money to this here is professional management, can buy a share of the mutual fund, or by accessing directly to the fund manager, or its authorized agent (to be found on their website).
- ETF traded on an exchange like stocks through an online broker, and the trader is no need to refer to the fund managers, as in the case of purchase or redemption of mutual fund units.
You can spend with all of the same ETF trade manipulation, and that the shares: buy, sell short, use leverage and various types of orders. Shares of mutual funds can only buy and sell (redeem his position).
What tools can be presented by ETFs?
As a rule, it shares that are included in stock market indices, such as the: S & P 500, Dow, Nasdaq and others. In other words, ETF and follow exactly reflect market indexes. And not just American. You can find almost ETF stock index in any country where the stock market works. Imagine what possibilities are open to you!
Furthermore you can find stocks ETF for foreign currencies, commodities, futures, real estate. Today it is hard to imagine a market area on which the stock investment fund would not be created.
- According to ETF trading is available within a day, as their price is calculated during the trading session. The cost of mutual fund shares are calculated only after the close of the trading session.
ETF are cheaper to buy and to handle than mutual funds. You only pay a brokerage commission and exchange fees. Since ETFs track indexes, they are passively managed and an additional fee for this you do not need to pay. Mutual funds, though not charge different exchange fees, but take quite a substantial fee for active management of the fund. ETF price depends solely on the price of tools included in the tracking code.
General Trade offers a wide variety of ETFs for trading. Some traders are interested in specific industries, such as pharmaceuticals, energy or technology. General Trade provides the largest selection of ETFs. Trade with GeneralTrade and you'll understand why thousands of traders use our Gtrade Platform for ETF trading.