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ETFExplore.com Advantages of ETFs
What are ETFs ?
- ETFs are securities that look like mutual funds but trade like stocks.
- ETFs are predominantly based on established indexes and track the movement of the indexes they are based on. eg: SPY tracks the S&P 500.
- ETFs are created as investment trusts and passive index based ETFs require less management effort.
Top Reasons Why ETFs Are Good For Individual Investors
- ETFs facilitate individual investors to get very specific exposure to various asset classes.
- ETFs are more tax advantaged than Mutual Funds.
- Most ETFs are passively managed and hence the expense ratio is much lesser.
- ETFs can be used on both the Long Side and Short Side.
- An ETF can be sold short even without an up tick in price.
- Leveraged ETFs can be used by investors that cannot buy stocks on margin.
- ETFs allow tax loss harvesting in separately managed accounts as they are like stocks.
Types of ETFs - Sample Set
- Broad Equity ETFs
- Large Cap ETFs
- Mid Cap ETFs
- Small Cap ETFs
- ETFs on the DJIA, NASDAQ and NYSE Indexes
- Leveraged Large Cap, Small Cap, Mid Cap ETFs
- Fixed Income ETFs
- ETFs on Corporate Bonds
- ETFs on Treasury Securities
- ETFs on Muni Bonds
- ETFs on High Yields and Convertibles
- Specialty ETFs
- ETFs that focus on Dividends Only
- ETFs that are Based on Technical Leaders
- ETFs that are based on Low P/E Ratio Stocks
- ETFs that are based on Timeliness
- ETFs that track only IPOs
- Sector ETFs
- Technology Sector ETFs
- Telecom Sector ETFs
- Consumer Staple ETFs
- Health Care ETFs
- Banking Industry ETFs
- ETFs based on Food & Beverage Company Indexes
- Energy Sector ETFs
- Alternative Energy Sector ETFs
- International ETFs
- ETFs based on MSCI Europe & Far East
- ETFs based on MSCI Asia Pacific Economy Indexes
- ETFs based on South American Economy Indexes
- ETFs based on Middle-East, African Economy Indexes
- ETFs based on ADRs Only
- Real Estate ETFs
- ETFs based on US Real Estate Companies
- ETFs based on Global Real Estate Companies
- ETFs based on International Real Estate Companies
- Commodity ETFs
- Gold ETFs
- Silver ETFs
- ETFs based on Commodity Baskets
- ETFs based on Precious Metals
- ETFs based on Base Metals
- Currency ETFs
- ETFs based on US Dollar Up / Down Movement
- ETFs based on Foreign Currencies
- ETFs based on Currency Baskets
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