What Is an ETF (SH)?
ETFs, exchange-traded funds, made their debut in the 1990s and have grown in number and popularity since. Savvy and novice investors both trade and add ETFs to their portfolios. To see if an ETF is a good investment fit, consider the following.
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Significance
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ETFs trade just like any other listed stock. As funds, they invest in many companies under one holding, usually with a particular theme, such as technology, health-care, oil, energy or coal.
Considerations
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An ETF can provide exposure to many indexes and regions that otherwise might not be available to small or retail investors. They can also limit risks that often come from investing in just one security.
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Benefits
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ETFs are professionally managed, charge lower fees, and offer a wide range of sectors, geographical regions and strategies.
Function
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Institutional investors use ETFs as a hedge, to make rapid trades, and to make large wagers on particular sectors like oil and gold.
Features
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ETFs can be bought, sold, held for investment, and sold short. Many have underlying options, and calls and puts can be traded. Some also pay dividends.
Potential
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ETF's can be easily traded. Some ETFs can also be quite volatile, active and profitable.
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