Questions tagged [etf]
To be used for any questions relating to Exchange Traded Funds.
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Why are daily rebalanced inverse/leveraged ETFs bad for long term investing?
I was reading this article about S&P 500 short ETFs:
https://www.zacks.com/stock/news/176217/4-ways-to-short-the-sampp-500-with-etfs
and I was confused when it said: "investors should note that ...
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8
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Investing in a leveraged index ETF for retirement. Risky?
I'm 23, and in addition to my 401k at work, I have a few thousand saved in an IRA. Right now I have it sitting in Treasurys earning around 3%.
Over the past 50 years the S&P has averaged around ...
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What are the important differences between mutual funds and Exchange Traded Funds (ETFs)?
I've been considering, but haven't committed myself yet to investing in Exchange Traded Funds (ETFs), but have to admit that I don't yet fully understand the use-case for them.
What factors are ...
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Why do people claim that it's hard to outperform the S&P 500? It has only increased in value by ~1.5x in the past 5 years
Whereas companies like Google, Facebook, Netflix, Amazon, Apple have all increased anywhere from 3x-6x in value in the past 5 years. If you just stuck with those companies, you would have easily ...
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1
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Understanding how an ETF works
I am trying to fully understand how ETFs work. For the sake of simplicity, let us restrict ourselves to physical replica ETFs.
Let us suppose that an ETF follows an index which tracks three stocks: ...
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2
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How are ETF prices calculated after the market is closed
For example:
Because the NASDAQ: DAX is tracking the index INDEXDB: DAX should its trading value be completely flat when the market the markets are open in the US, but closed in Germany? I'm not ...
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What differentiates index funds and ETFs?
Many companies offer index funds and ETFs. If two funds or ETFs track the same fund, what differentiates the two? Is it common for one index fund to outperform another? How can this happen if the ...
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No transaction fee ETF trades - what's the catch?
I just noticed TD Ameritrade has program where you can trade from a list of ETFs with zero fees.
Sounds like it could save me a bit of money, but my cynical side wonders how they make money off such ...
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Long-term cash-equivalent ETFs for "cash" allocation in a portfolio?
My retirement account goal analyzer advises that I keep 3% in cash. My retirement date is over 30 years from now, so I can tolerate heavy volatility and certainly don't need liquidity.
Does it make ...
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"Cap gains exposure" of an ETF -- what does it mean?
Morningstar provides an ETF data point called potential cap gains exposure. For example, here is Vanguard's Europe ETF (VGK):
This value is negative 78% for VGK. I understand that this is a good ...
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What happens to your investment if the broker (which acts as a custodian) goes bankrupt?
For instance, you purchased ETFs using a broker that also acts as a custodian, what will happen to your investment in case the broker / custodian goes bankrupt? Will you lose all your investments?
(...
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Understanding downside of triple-leveraged ETF
What happens to the price of the triple-leveraged ETF if the S&P 500 loses more than one-third of its value (i.e., the return is below -33 1/3%)?
Does it mean the value is equal to zero?
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Pros & cons of buying gold directly vs. investing in a gold ETF like GLD, IAU, SGOL?
Google search brings up some articles on this topic, but they can be biased, so:
What are the advantages and disadvantages of buying physical gold vs. investing in a gold ETF like GLD, IAU, or SGOL?
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Wash sale rule + Mutual Funds/ETFs?
According to IRS rules, you can't sell a security, take a capital loss on your taxes, and then buy back the same or a "substantially identical" security within 30 days. However, "substantially ...
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Is there a currency risk in UCITS ETFs?
I'm interested in buying ETFs that track the US market, but because of the latest EU MiFID regulations, I'm only allowed to purchase investment products that come accompanied by some "KID", a Key ...
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What forces affect the value of my ETF?
I hold a position in CSPX, an ETF tied to the S&P 500 traded on the LSE. The closing price of CSPX was 262.68USD at a gain of 0.2%. The S&P 500 itself closed higher at at 1.6%. There are a ...
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Are there any non-decreasing securities on the stock market?
Are there any securities traded on the stock market (i.e. ETPs) that never decrease in value?
As an aside (in case anyone mentions bonds):
I'm aware there's ETFs for AAA-rated government bonds, but ...
24
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Why would a long-term investor ever chose a Mutual Fund over an ETF?
(I read this previous question but would like to differentiate my question by having it focus exclusively on long term, buy and hold investing).
From my understanding, it is conventional wisdom that ...
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Regular contribution threshold for ETF vs Index Mutual Fund?
I've seen enough info out there comparing lump-sum investments into ETFs vs mutual funds with respect to broker commissions in the case of ETFs, and the discrepancy between MERs between the two. In ...
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Why is the expense ratio of an index fund sometimes higher than its equivalent ETF?
Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)'s expense ratio is 0.14% whereas VTI, its equivalent ETF, has an expense ratio of 0.03%. Why is the expense ratio of an index fund ...
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Should ETF currency risk be avoided by changing denomination or selling in a different currency?
I am about to purchase international stock and bond ETFs as part of my retirement portfolio.
I am concerned about currency denomination. Suppose that I purchase an ETF in Euros and when I start ...
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1
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Do ETF owners buy and liquidate units from the market when gap between market value and value of underlying shares is large?
Due to various reasons, an ETF, even an index ETF might trade at a value lower that the value of its underlying securities.
In such a situation, can the company managing the ETF actually buy from the ...
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What is this discrepency between Fidelity's and Google's stock price chart; large price spike?
I generally use Google throughout the day to track the price of stocks. I understand there can be minor discrepancies between sources based on the time the data is collected and how it is displayed ...
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The value/price of an ETF
From my understanding an ETF has the advantages of a managed fund with the advantages of a stock.
Advantages of a managed fund:
a) An ETF is a collection of stocks that are packaged into a single ...
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Is the gold and silver in the GLD and SLV ETFs leveraged?
There are various blogs and videos that indicate that the gold that GLD holds (via HSBC) and the silver that SLV holds (via JP Morgan) is leveraged 50 to 1 or 100 to 1. For me there are some ...
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Why an ETF mirrors the underlying index on a day to day basis but not on a long term basis
Some ETFS like NUGT,DUST say that they replicate the performance of the underlying index on a daily basis.
My first question is, do all ETFS do this, or only some? Also, why does it say that "not ...
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At what point do index funds become unreliable?
Passively investing in exchange-traded funds that track some broad index is often recommended for private investors that don't have the time or expertise for active investment. In particular, index ...
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Why do ETFs that replicate the S&P 500 vary significantly in price?
From Wikipedia:
Exchange-traded funds (ETFs) that replicate the performance of the index are issued by The Vanguard Group (NYSE Arca: VOO), iShares (NYSE Arca: IVV), and State Street Corporation (...
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Is it insider trading when I already own stock in an ETF and then the ETF adds the company I work for?
Let's say I own shares in the MSCI World ETF. Company X, where I am an employee, is currently not part of it. What happens when in ie a year Company X gets added to the ETF - Is my owning stock in it ...
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Empirical evidence on active vs passive investing
Many people believe that passive investment (say buying into an ETF) typically outperforms actively managed funds because the latter induce more fees.
Are there any (solid) empirical studies ...
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ETF vs Mutual Fund: How to decide which to use for investing in a popular index?
How do you decide between investing in an ETF, vs. in a mutual fund, for the popular stock indexes? Trading costs, tax efficiency, capital gains?
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What are the "capital gains" my ETF is distributing to me alongside its dividends?
Today I noticed several ETFs I own, including SLYG, opened at a significantly lower value than they closed at yesterday (SLYG was $7.975 lower to be exact). Apparently yesterday a dividend was ...
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Assessing the value of an ETF
I recently read through Graham's The Intelligent Investor and am looking at what index ETFs or Index Mutual Funds it makes sense for me to invest in. As I was considering this I realized that, at ...
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What low-fee & liquid exchange-traded index funds / ETFs should I consider holding in a retirement portfolio?
I'm still (one year later) going through an exercise to restructure my retirement portfolio.
To date, I've been using a mix of exchange-traded index funds. Some trade on the TSX, and others trade in ...
8
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Can an ETF perform differently than its holdings?
A mutual fund is just a portfolio of stocks (or other assets) and hence the fund performs as well as its holdings [minus various fees]. However, an exchange traded fund (ETF) performs, like a stock, ...
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What to look for in an ETF
I wish to invest in an ETF.
Sure, I can see what companies it comprise of.
Sure, I can open brokerage account in my bank, etc.
How do I know the ETF I purchase is legitimate? What if the ETF is ...
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Why does the iShares EEM ETF have a higher expense ratio than similar ETFs like VWO?
Why is iShares able to charge more for EEM in comparison to VWO (a very similar ETF)?
Investors/Traders are mostly institutional and in general, these entities have more insight (though simple ...
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How often do the S&P 500 components change?
And do index funds such as SPY and VOO usually rebalance immediately to reflect the change?
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Can ETFs trade at negative prices?
With Oil futures trading at negative prices yesterday, what happens to ETFs like USO that hold these contracts? If one buys such an ETF, is it possible to lose more than the price at which it is ...
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What happens with ETF if underlying index changes rapidly in a short period of time? [duplicate]
Since public interest in ETF is growing rapidly, and any novice investor looking where to put their money would probably see recommendations to invest in ETF literally within the first page of the ...
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Who determines, and how, the composition of the S&P 500 index?
I thought S&P 500 would contain the top 500 U.S. companies by market cap, but apparently that is not the case?
e.g., Facebook (FB) was only recently added and has market cap of $100B whereas ...
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Why do passive ETFs require so much trading (and incur costs)?
As far as I've understood, the idea of passive ETFs is to track an index. Typically, the index is a value-weighted stock market index, such as the S&P500.
Now, if I'm not mistaken, tracking a ...
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How do I bet one stock will outperform another stock?
How can I bet that company (a) will outperform company (b)? It seems like the simplest way would be to buy long company (a) and short company (b). However, this strategy seems crude since I will still ...
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Why do mutual funds and ETFs in the U.S. not capitalize dividends?
I am from Europe/Belgium and in Europe it is common to have funds and ETFs which capitalize/re-invest instead of distribute the dividends. I have been looking to the Vanguard ETFs and funds lately, ...
4
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1
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Consider pre-tax status of retirement accounts in determining portfolio allocation?
I have a mix of accounts for my investments including brokerage, 401k and Roth IRA.
I handle all my own investments and my current target allocation is 48% US stocks, 24% international stocks, 8% ...
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Why might a brokerage firm stop offering a particular ETF commission free?
I have been happily buying units of IVV commission free via TD Ameritrade. They just revised their list of free ETFs and sadly IVV is not one of them. Most of the other institutions don't offer it ...
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What is the difference between shares and ETF?
For example, I see that this: Vanguard FTSE All-World ex-US Index Fund Investor Shares (VFWIX) is
Also available as an ETF and at a lower cost as an Admiral™ Shares
mutual fund
What is the ...
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How can I tell if an ETF is expensive?
For stocks, I can easily look at the price/earnings ratio, and, according to The Intelligent Investor, stand clear of those with a ratio higher than 20.
How can I tell if the current price of an ETF ...
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What's the benefit of paying more fees on wealthfront?
I recently become interested in wealthfront, and plan to make the first real investment in my life. However, as I read more about mutual funds and ETFs, I realize that wealthfront is actually built ...
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Trying to understand the toxicity of a Leveraged ETF as a hedge
Using TWM as an example. Long term it looks very crazy. Like back in 2007 it was at $600 and now it is at $40. Let's say I have $10,000 in investing. My plan was to put $1,000 in something like TWM to ...
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