Exchange traded funds (ETF) are securities that track a sector, commodity, or an index. Unlike mutual funds that can only be traded once a day, Exchange traded funds (ETF) prices fluctuate all day, much like specific stocks being exchanged on the stock market.
According to veteran investor Darren Herft, ETFs have opened a new vista for investors as they can be traded on most stock exchanges in the same way as regular stocks.
“Exchange traded funds (ETF) can be organised to track a diverse array of investments, ranging from individual commodity prices to any number of securities,” says the Australian entrepreneur.
“They can be designed to track investment strategies!” he adds.
Darren Herft believes that the lower expense ratios coupled with lower brokerage fees makes them a lucrative option for investors looking to diversify their holdings.
“For investors looking for more liquidity, Exchange traded funds (ETF) provide a better avenue than mutual funds,” says Darren Herft.
He believes that in many ways, Exchange traded funds (ETF) hold an edge above stocks.
Darren Herft says, “Rather than holding only one asset like a stock, Exchange traded funds (ETF) hold multiple assets and that has helped their popularity.”
A single Exchange traded fund (ETF) could have numerous stocks under its umbrella. While some are nationally focused, others are global.
Darren Herft says that even within the Exchange traded fund (ETF) world, there are various options for investors to consider.
“Their utility can range from income generation to hedging or partly offsetting risks in an investor’s arsenal,” says Herft.
He thinks that more fiscally conservative investors might find Bond Exchange traded funds (ETF) to be suited to their needs and temperament. Bond Exchange traded funds (ETF) provide regular income to their holders depending upon the performance of the bonds under their umbrella.
“Bond ETFs could have government bonds, corporate bonds or municipal bonds in their ambit and unlike bonds, they don’t have a maturity date,” says Herft.
Herft says that more risk-tolerant investors might find their match in Stock Exchange traded funds (ETF). Consisting of a basket of stocks that track a whole sector or industry, they provide an investor with a uniquely diverse portfolio with established high performers coupled with newer stocks with growth potential.
“It’s a good collection of stocks and investors don’t have to worry about high fees associated with stock mutual funds,” adds Herft.
Other types of Exchange traded funds (ETF) include Industry ETFs, Commodity ETFs, Currency ETFs, and Inverse ETFs. Herft thinks that the most attractive quality of this investment vehicle is its ability to be diverse and specialized at the same time.
While the AFL aficionado believes that Exchange traded funds (ETF) can be a useful vehicle for many investors, he is of the opinion that they should not be put on a pedestal.
“As with any investment, there are pros and cons and I would recommend anyone looking to invest in anything to do their own independent research and consult experts if they can, before making a decision,” he adds.
TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.
The S&P/TSX composite index was up 103.40 points at 24,542.48.
In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.
The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.
The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.
The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.
This report by The Canadian Press was first published Oct. 16, 2024.
TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.
The S&P/TSX composite index was up 205.86 points at 24,508.12.
In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.
The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.
The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.
The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.
This report by The Canadian Press was first published Oct. 11, 2024.
TORONTO – Canada’s main stock index was little changed in late-morning trading as the financial sector fell, but energy and base metal stocks moved higher.
The S&P/TSX composite index was up 0.05 of a point at 24,224.95.
In New York, the Dow Jones industrial average was down 94.31 points at 42,417.69. The S&P 500 index was down 10.91 points at 5,781.13, while the Nasdaq composite was down 29.59 points at 18,262.03.
The Canadian dollar traded for 72.71 cents US compared with 73.05 cents US on Wednesday.
The November crude oil contract was up US$1.69 at US$74.93 per barrel and the November natural gas contract was up a penny at US$2.67 per mmBTU.
The December gold contract was up US$14.70 at US$2,640.70 an ounce and the December copper contract was up two cents at US$4.42 a pound.
This report by The Canadian Press was first published Oct. 10, 2024.
