Following activist investors can be so profitable that an ETF has been created to track their moves.
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 | Jun 16, 2015
So far in the second quarter, the financial sector is the top performer among the 10 main sectors, at least according to the select sector SPDR ETFs.
By Lawrence Meyers | May 27, 2015
My favorite asset class is small-cap stocks. That’s because it's where you are most likely to find interesting little companies that other people pass over.
By Lawrence Meyers | May 22, 2015
In seeking three solid choices for ETFs in each asset class, we hit one of my favorite categories: mid-cap value ETFs.
By Rick Pendergraft | Apr 30, 2015
Since March 12, the iShares China Large-Cap ETF has gained 25.9%. I'm now concerned that the fund has jumped too much in such a short period of time.
By Rick Pendergraft | Apr 7, 2015
Alcoa will kick off the first quarter earnings season tomorrow after the closing bell, but next week is all about financials.
By Kent Thune | Apr 6, 2015
The best ETFs of Q1 2015 can provide clues and insights about market trends in the coming quarters.
By Kent Thune | Mar 26, 2015
If you are looking for ways to profit from a weak euro, you'll want to consider these ETFs.
By Rick Pendergraft | Mar 26, 2015
I expected a fair number of stocks and ETFs on the bearish scan. What jumped out was that three of the 37 names on the list were prominent bond ETFs.
By Rick Pendergraft | Mar 19, 2015
What jumped out at me after the Fed announcement wasn’t so much the overall market as what happened to bank stocks after the meeting.