Diving into the world of ETF bonds without any sense of familiarity could seem intimidating to many potential investors. But this three-letter investment vehicle is not as complicated as one might think.
People who have a general idea about how ETF works from reading various ETF reviews, find it easy and a worthy addition to their portfolio.
What Are ETFs?
The logic behind an exchange-traded fund is that it is not a singular entity but a collection of funds put together for investment. This collection might include stocks, bonds, commodities, etc., meaning when you invest in an ETF, the investor is exposed to the underlying assets held by that particular fund. The best thing about an ETF is that an investment manager can handle it on your behalf.
6 Facts About ETF Reviews
But there are still a lot of investors who remain interested in ETFs but do not understand them well. One can try to increase their knowledge about this type of collective investment by reading ETF reviews.
The following are 6 facts you can learn about ETFs through ETF reviews and are as follows:
1) In total, there are different types of ETFs available in the market
…and each one has a distinguishable feature and varying levels of risks.
Investors have to choose an ETF type from the following list before they can put their capital in it.
- Stock ETF
- Commodity ETF
- Bond ETF
- Industry ETF
- Inverse ETF
- Leveraged ETF
It is worth noting that some of the aforementioned exchange-traded funds are way riskier than others.
2) ETF reviews help investors make an informed decision about their investment
…by laying out everything they need to know regarding any particular ETF available in the market. By sharing details worth knowing about several top ETFs, these reviews clear the path for investors who do not have the time to research every single promising ETF available in the market. You can find risk rating, performance history, associated expenses, etc., in well-researched ETF reviews.
3) People tend to think that ETFs are like stocks in many ways
…but only ETF reviews can help investors identify some of the major differences between stocks and exchange-traded funds.
An exchange-traded fund has a tighter spread as compared to usual stocks. ETFs bear some interesting dissimilarities with mutual funds.
One of the main reasons why investors turn to ETFs instead of mutual funds is:
- tax efficiency,
- low expense ratio, and
- no requirement for minimum investment.
4) The benefits of a particular exchange-traded fund are revealed to investors during their research
…because there is no other way to find out what is most suitable to them.
As ETFs have grown to be a popular type of investment vehicle, people can analyze, research, and familiarize themselves even more than ever before. Unlike stocks, ETFs are easier to buy and sell because there is an exchange (third-party) involved. To better educate ourselves about exchange-traded funds, it is important to rely on ETF reviews.
5) This industry has been growing for the past two decades
…and experts believe there is a long way ahead for ETFs.
In the past few years, there have been several ETFs whose positive returns made headlines.
Some of them were:
- Barclays Short Term Municipal Bond ETF
- iShares 1-3 Year Credit Bond
- Vanguard Short-Term Bond ETF
There was also an ETF in the past which remarkably gained over 111% back in 2008.
Investors need to collect pieces of historical information like these in order to plan better with some worthy exchange-traded fund investments currently available at the present moment.
6) Useful and updated statistics regarding ETFs are only available to potential investors
…who prefer to read and analyse several ETF reviews.
These statistical facts can help people understand whether the present moment is good enough to enter the market. Currently, the total value of assets managed through ETFs worldwide is just north of $7 trillion. Out of the $7 trillion, approximately $5.4 trillion worth of assets of ETFs are available in the U.S. markets.
This leads us to the fact, at the moment, U.S. markets and U.S-based ETFs are often more profitable than other options available for interested individuals.
ETF Reviews – Take Your Time, Invest Well
Investing is an important thing to do, whether you’re 18 or 78. Without it, retirement just wouldn’t be as possible as it is for so many people today. Before you invest, do your due diligence and put in the research. Check out the ETF reviews, choose carefully, and then be consistent with your contributions!
Are you ready to start investing in ETFs? Why or why not?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.