What are Exchange-Traded Funds (ETFs)?
Funds are an easy way to invest in a pool of different companies all at once. Exchange Traded Funds (ETFs) are funds that you can buy shares of in the stock market. Different ETFs have different investment strategies. There are ETFs that focus on different sectors like technology, finance or even social impact. When investing in an ETF, the value of your investment will depend on how the group of companies is doing. One famous ETF is SPDR, which tracks the US S&P 500. It is the largest ETF with assets of more than US$250 billion.
Why you should invest in ETFs
ETFs allow you access to a variety of asset classes or individual sectors of the U.S. market with the ease of trading a single security. For example, instead of buying a huge number of individual US technology stocks, you can invest in the US technology sector with a single ETF, such as the Dow Jones U.S. Technology ETF.
Online trading has inherent risk due to system response, execution price, speed, liquidity, market data and access times that may vary due to market conditions, system performance, market volatility, size and type of order and other factors. An investor should understand these and additional risks before trading.