About ETFs
“Exchange Traded Funds (ETFs) are investment companies that are legally classify as open-end companies or Unit Investment Trusts (UITs), but that differ from traditional open-end companies and UITs.”
Available ETFs for purchase:
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Broad-Based Equity Index Shares:
These include indices like S&P 500 Index, the NASDAQ Composite Index as well as Cap indices.
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Sector/Industry Equity Index Shares:
These include indices such as energy, financial services, healthcare, real estate, technology, industrial, transportation and consumer goods.
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Global/International Equity Index Shares:
These indices are concentrated on a particular country or region.
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Bond Index Shares:
These include US Treasury bonds and corporate bond indices.
What are ETFs
ETFs differ from traditional open-end companies in respect of...
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Individual shares are not sold directly to traders and these shares are issued solely in big numbers and are called ‘Creation Units’.
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Creation Units are only bought in securities that project the EFT’s portfolio and the buyers are mostly institutions.
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The institutions that buy a Creation Unit break down these ETF shares and sell them on a secondary market as individual shares.
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Investors who wish to sell their ETF shares can either sell them as individual shares in secondary markets or sell them back to the ETF.
Forex
Basics
