We highlight three of the best ETFs to buy in 2016 from a list of 20 funds that were selected by professional money managers.
What Are ETFs?
The term ETF is short for Exchange-Traded Fund – a security that tracks an index, commodity or basket of stocks. An ETF is somewhat similar to an index fund except that shares of an ETF trade just like a stock on a stock exchange, so they can be bought and sold very easily. ETFs are valuable investment tools because, unlike mutual funds, they can be traded throughout the course of a day.
Most ETFs track indexes. For example, the SPDR S&P 500 (NYSE: SPY) tracks the Standard & Poor’s 500, while PowerShares QQQ (NYSE: QQQ) tracks the Nasdaq-100.
ETFs can be appealing to investors for several reasons:
ETFs allow investors to sell short, buy on margin, and purchase as little as one share at a time
With lower management fees, ETFs are less expensive than mutual funds
ETFs can efficiently help diversify an investor’s portfolio
ETFs allow people to invest in a specific industry
ETF gains aren’t taxed as heavily as those earned through mutual funds
Downsides to ETFs are that, like stocks, they typically have to be bought through a broker; some countries have limited ETF markets; and they aren’t all necessarily designed for long-term investors. While not for everybody, ETFs are a good way for investors to diversify their portfolios at a low cost.
To browse through a comprehensive list of ETFs, visit Yahoo! Finance’s Exchange-Traded Fund Center.
By Rick Pendergraft | Jan 27, 2016
Selling pressure has brought the financial sector ETF down to a critical support level and has put the fund at oversold levels not seen in three years.
By Rick Pendergraft | Dec 3, 2015
In an unusual technical situation, the iShares U.S. Real Estate ETF offers potential moves in opposite directions for short- and long-term investors.
By Lawrence Meyers | Nov 19, 2015
If you're investing for retirement, look at these high-yield ETFs that offer diversification and low risk.
By Rick Pendergraft | Nov 17, 2015
The Market Vectors Semiconductor ETF broke below the lower rail of its channel in late July and is now fighting back and looking to establish a new trend.
By Rick Pendergraft | Oct 22, 2015
The weekly SPY chart is showing ominous signs for the S&P 500 index.
By Rick Pendergraft | Sep 15, 2015
Here is what I saw on the weekly chart of Utilities Select Sector SPDR that prompted me take a bullish stance on the ETF.
By Rick Pendergraft | Sep 8, 2015
The last time the SPY, QQQ and DIA index ETFs all saw their 13-week moving average cross bearishly below their 52-week moving average was back in 2011.
By Rick Pendergraft | Aug 11, 2015
The market has been range-bound for the past six months, but the semiconductor sector has been lagging behind the overall market.
By Kent Thune | Jul 29, 2015
Will the new ETMF from Eaton Vance be the next big thing in the investment world? Here's what you need to know about exchange-traded managed funds.