What Are Exchange Traded Funds

You may have heard of the ETF. What are they exactly?

Introduction
In a few differences, ETF or Exchange-traded fund, is in the same way a mutual fund that traded in the stock exchange. while eliminating some of the drawbacks mutual funds have, they have a number of advantages of stock.

The purpose of ETF
Do you have that you want to purchase the shares of the index such as the S & P 500 and Dow Jones Industrial Average to you ever? Well, you can not do it directly, but you can do it because the ETF. In an effort value of the ETF per share to track the commodities up and down or a specific index in general, people who run the ETF's is investing in the same futures and stocks that make up the products or index. People with access to stock trading to buy goods and index indirectly easily, sell will allow the ability to this.

Example: SPY - SPDR Trust Series I:
One of the ETF the most popular is the SPY, The goal is to track the price and performance of 500 Index S & P. This is not the same price as the index, but a small percent within most of the time, the chart will look like this index.

Example: QQQQ - PowerShares QQQ Trust, Series 1:
The purpose of this fund is to issue the shares of all shares that make up the Nasdaq 100, to track the Nasdaq 100 Index by redemption.

Example: EEM - i iShares MSCI Emerging Markets Index Fund:
This ETF looks to track the price and performance of the MSCI emerging market index following the performance of foreign stocks. The fund is non-diversified. Since this is directed to a specific department, it means that it is not as secure as exchange traded funds other.

Example: USO - United States Oil Fund LP:
This product ETF is trying to track performance and the price of crude oil price, West Texas Intermediate light, the andsweet crude oil. They do this by buying and selling futures contracts for what some other oil, and natural gas, on an ongoing basis. It is also non-manifold, but it is an easy way to do the deal on the basis of crude oil price.

Benefits of ETF
Tradable similar diversity, and equity, efficiency, and the main advantage of the ETF is, including the transparency of assets low-cost, tax.

ETF What is
ETF, is a funding may be configured in several different ways. Usually, it means that there is no need to determine what needs to be merchandise for administrators increase the value of investment funds continuously passively, they are managed. Instead, the administrator is depending on the funds simply, you can simple as owning the shares constitute the index, has adjusted the stock, certain, that the price is in accordance with the chart of the index You must ensure that you have to as closely as possible and commodities index, to track.

Where to find them
Together finance many websites, and ETF screener, including securities companies, it offers a stock screener for free. Yahoo! Finance, has a good site that allows you to view a list of the best performers in several different categories.