It
is a fact that ETFs are similar as well as bit different from mutual funds. One
of the primary similarities between the two is that both funds are baskets or
assets, which are related with individual bonds or stocks, and managed
professionally. Both funds are considered less risky than any other funds and both
come with range of options in terms of investment. However, ETFs are considered
different from mutual funds because they are traded on exchange as per common
stock. ETFs come with real time pricing changing all the time, but mutual funds
does not offer this facility (Vanguard )
What is Exchange-traded fund (ETFs)?
ETF means exchange traded fund,
which is a securities basket, bond or commodity that a person can buy or sell
with the help of a brokerage firm. This buying and selling process happens
through the stock exchange. All classes of assets are covered under ETFs
ranging from alternative assets to traditional investment as well as currencies
& commodities. For individual investors, ETFs are one of the most valuable
and crucial products which they can easily buy and sell (Carrel, Dion and Dion)
How are they like stocks? How are
they different?
It is important to mention here that
ETFs and stocks don’t have just one similarity that they are ETFs are just
considered like the stocks, other than that they are different in so many ways.
The major difference between the two is that stock deals with a single company,
whereas a diversified opportunity and exposure is provided by ETFs to a market,
sector or industry. The internal mechanics of ETFs do also differ from a common
stock (Abner and Gastineau)
What are some popular Exchange-traded
fund (ETFs)?
The investors have many choices in
terms of buying ETFs as they come with so much variety. Few popular ETFs for
the investors are Financial Select Sector SPDR Fund (XLF), Vanguard FTSE
Developed Markets ETF (VEA), Vanguard Total Stock Market ETF (VTI), SPDR Gold
Shares ETF (GLD), Vanguard S&P 500 ETF (VOO), and SPDR S&P 500 ETF
(SPY) etc (ETF TRENDS)
What current news can you find about Exchange-traded
fund (ETFs)?
According to a news article in WSJ,
it is revealed that investors are looking to buy smart ETFs more so that they
can avoid all kind of volatility. It has been observed that two ETFS have shown
more interest from investors and have become popular because they are less
volatile in nature (Loder)
References of Exchange-traded fund (ETFs)
Abner, David J. and Gary L. Gastineau. How ETFs
are different from stocks. 2012. 31 March 2019.
<https://www.fidelity.com/learning-center/investment-products/etf/how-etfs-different-than-stocks>.
Carrel, Lawrence, Don Dion
and Carolyn Dion. What are ETFs? 2011. 2019 March 2019.
<https://www.fidelity.com/learning-center/investment-products/etf/what-are-etfsLawrence
Carrel>.
ETF TRENDS. POPULAR ETFS.
219. 31 March 2019. <https://www.etftrends.com/popular-etfs/>.
Loder, Asjylyn. Investors
Looking to Escape Volatility Turn to ‘Smart’ ETFs. 2019. 31 March 2019.
<https://www.wsj.com/articles/investors-looking-to-escape-volatility-turn-to-smart-etfs-11550667600>.
Vanguard . ETFs vs.
mutual funds: A comparison. 2019. 31 March 2019.
<https://investor.vanguard.com/etf/etf-vs-mutual-fund>.