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Definition of ETF:
An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index.
Got it!!
But tell me more about it. I have been trying to read and understand but really not getting it. So please help me.
Definition of ETF:
An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index.
Got it!!
But tell me more about it. I have been trying to read and understand but really not getting it. So please help me.
Thank you for all the help.
Just ignore LowerExpectations. He's a troll around here, always making insulting comments at people. Why he hasn't been banned I have no idea.
Index funds (ETF's) are PASSIVELY managed mutual funds. There are cheap because the companies that sell them (iShares, SPDR, Vanguard, etc) do NOT pay the usual huge commissions to brokers who are paid when they sell actively managed funds. For example AGG and VOO have expense ratios of between 0.05% and 0.07% per year. And since they aren't busy making a bunch of trades they have low turnover ratio costs. That saves you even more $$.
This chart should tell you to invest in index funds. That's PASSIVELY managed funds...
Just ignore LowerExpectations. He's a troll around here, always making insulting comments at people. Why he hasn't been banned I have no idea.
Index funds (ETF's) are PASSIVELY managed mutual funds. There are cheap because the companies that sell them (iShares, SPDR, Vanguard, etc) do NOT pay the usual huge commissions to brokers who are paid when they sell actively managed funds. For example AGG and VOO have expense ratios of between 0.05% and 0.07% per year. And since they aren't busy making a bunch of trades they have low turnover ratio costs. That saves you even more $$.
This chart should tell you to invest in index funds. That's PASSIVELY managed funds...
As usual you don't actually know what you are talking about. Index funds aren't the same thing as etfs, an index fund can be an etf or mutual fund. An etf isn't a mutual fund either. Not to mention that etfs aren't all passive, there are active and passive etfs. You whine about me trolling but more accurately I point out where you are blatenly incorrect
Fwiw agg's gross expense ratio is 9 bps currently being discounted 1 bps to 8 net and as of 02/28 per Morningstar has a turnover ratio of 318%
Last edited by Lowexpectations; 10-15-2015 at 12:47 PM..
Trying to think of an active managed ETF- I guess specialty/ sector ETF/ETN's are active managed. It just escapes as to which would be considered actual active managed funds. A little tired today.
As usual you don't actually know what you are talking about. Index funds aren't the same thing as etfs, an index fund can be an etf or mutual fund. An etf isn't a mutual fund either. Not to mention that etfs aren't all passive, there are active and passive etfs. You whine about me trolling but more accurately I point out where you are blatenly incorrect
Fwiw agg's gross expense ratio is 9 bps currently being discounted 1 bps to 8 net and as of 02/28 per Morningstar has a turnover ratio of 318%
not to mention that times are changing . fidelity large caps overwhelmingly beat the s&p 500 index 6 out of the last 7 years . more and more the index's have been getting more over valued and the value in stocks has been found elsewhere .
it was a landslide the 6 years as almost all of fidelity 20 some odd large cap funds beat the s&p index . i only follow fidelity so i can't comment on the other family's .
Last edited by mathjak107; 10-15-2015 at 03:28 PM..
Definition of ETF:
An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. An ETF holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index.
Got it!!
But tell me more about it. I have been trying to read and understand but really not getting it. So please help me.
Thank you for all the help.
Personally I am not a big fan of ETFs. I think there will be major liquidity issues with some of the names out there, along with some surprises when people find out what was wrapped into some of these products. Bond ETFs are a disaster waiting to happen. With that said, I do buy ETFs that are country-focused from time to time. RSX is one of my current holdings that I bought back at the beginning of the year in the $12s-$13s range when the financial media was trying to make it seem like Russia was going out of business. Well, Putin still in business and trading over $17/share.
ETFs and ETNs are designed to give you exposure to some specific asset. Want to trade crude oil, but don't want to buy futures contracts? Buy USO instead. Want to trade the S&P 500 instead of individual stocks? Buy SPY. With all the different ETFs out there now you can trade practically anything.
As I said in the first sentence, ETFs are designed to give you exposure to some specific asset, but that doesn't mean they do what they are necessarily supposed to. All ETFs were not created equally, some do a great job and others do a terrible job. You've got to be very careful when you trade them, otherwise you could make a bet that crude oil goes up and be right, but your ETF went down in the process. That happens a lot, especially with commodities.
Yes JayGatsby I have seen commodity ETN's become broken in which the fail to track the underlying commodity. Another serious issue is contango on contract rolls
As usual you don't actually know what you are talking about. Index funds aren't the same thing as etfs, an index fund can be an etf or mutual fund. An etf isn't a mutual fund either. Not to mention that etfs aren't all passive, there are active and passive etfs. You whine about me trolling but more accurately I point out where you are blatenly incorrect
Fwiw agg's gross expense ratio is 9 bps currently being discounted 1 bps to 8 net and as of 02/28 per Morningstar has a turnover ratio of 318%
As usual you are trolling. An index fund is a passively managed mutual fund. When people speak of a "mutual fund" in the generic sense they usually mean actively managed mutual fund. Index funds are also sometimes referred to as ETF's (ex- "total stock market ETF").
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