Top Nav

ETFs

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.

The Future Is Here: Investing in Robotics

One of the most well-known robots in history, Star Wars’ C-3PO, could fluently speak over 6 million languages. To be sure, he set a high standard, one that likely gave other robots of his age an insecurity complex. But in all seriousness, C-3PO helped popularize the notion of using robotics in everyday life. And that [...]

OIH Stock Chart Analysis (Market Vectors Oil Services)

The Market Vectors Oil Services (NYSE: OIH) caught my attention this past weekend as a number of the stocks in the oil services sector appeared on my bearish scans. Rather than cover the companies individually, I decided to look at the OIH itself to see what could be gleaned from the charts. The weekly chart [...]

The Only Small-Cap Index ETF You Should Own

As I wrote on Wednesday, with small caps off to a rough year and large-caps hitting record highs, there is a compelling case to be made for buying the little guys over the big boys right now. But not all small cap funds are created equal. And you’ll be surprised to find that there are [...]

Daily Stock Analysis: USO Chart (United States Oil Fund)

I wrote about the United States Oil Fund (NYSE: USO) back on April 3, but the fund caught my attention again last night. Earlier this month I pointed out how the 50-day moving average had been a pivotal support level and that if it broke that support the USO could head down to as low [...]

Daily Stock Analysis: S&P 500 SPDRs and SPY Charts

With the market struggling over the last few days and the volatility increasing over the last few weeks, I thought it might be helpful to take a look at one of the major index ETFs to see what is going on with the overall market. I selected the S&P 500 SPDRs (NYSE: SPY) as it [...]

Find The Right Stocks In A Volatile Market

As this market gets increasingly volatile it’s important to revisit your long-term investing strategy to make sure that you don’t waver. As I wrote last week, and as we’ve all known, a market correction wouldn’t be a surprise. And in fact, it wouldn’t necessarily be a bad thing. If you look back in time you’ll [...]

The Best Dividend Growth ETF For Your Money

I’m always intrigued by new small-cap ETF offerings. These investment vehicles are a great way for investors that aren’t yet comfortable owning individual small-cap stocks to gain diverse exposure to this high-potential asset class. And when a small-cap ETF is focused on dividend growers – companies that regularly reward shareholders by increasing their dividends – [...]