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Questions tagged [etf]

To be used for any questions relating to Exchange Traded Funds.

59
votes
5answers
7k views

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 ...
43
votes
8answers
15k views

Is this projected return from Wealthify too low?

I am really new to investing and I am so confused. Books, blogs and conferences suggest that investing is the way to multiply wealth. I do not have enough start up money to play with mutual funds, ...
29
votes
2answers
1k views

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 ...
25
votes
7answers
2k views

Why is the dominant investing advice for individuals to use mutual funds, exchanged traded funds (ETFs), etc

The dominant advice on this site (including that which I give to novices) regarding investing is to only invest in fund vehicles (mutual funds, ETFs, etc), rather than in individual stocks. Why is ...
23
votes
4answers
4k views

What is the difference between these two S&P 500 ETF?

I wanted to invest in the Vanguard S&P 500 ETF which has the ISIN code US9229083632 However I just discovered it is not available in my country. As an alternative I am considering investing in ...
23
votes
3answers
1k views

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 ...
20
votes
4answers
5k views

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 ...
20
votes
2answers
2k views

How to know if two ETFs are 'substantially identical' according to wash sale rules?

Wash sale rules are pretty straight forward when you're trading stocks directly. However, how are these rules applied to ETFs? Right now I own shares of CMF and want to do some tax-harvesting on some ...
19
votes
7answers
3k views

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 ...
19
votes
2answers
474 views

What's an Exchange-Traded Fund (ETF)?

I've been hearing a lot about exchange-traded funds, or ETFs. What exactly are they, and how would I use them?
18
votes
5answers
13k views

Why don't SPY, SPX, and the e-mini s&p 500 track perfectly with each other?

These tickers (SPY, SPX, /ES) are all based off the S&P 500 yet the relative lows and highs diverge. Can someone provide a basic explanation what causes this to happen? I feel like it may stem ...
18
votes
4answers
4k views

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 ...
17
votes
5answers
3k views

Why might a robo-advisor service like Betterment be preferable to just buying a single well-performing index fund like SPY?

Edit: I think it would be beneficial for any answers to include whether the answerer uses a diversified portfolio or not in their own finances, and whether they have any affiliation with Betterment or ...
17
votes
3answers
1k views

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 ...
15
votes
3answers
1k views

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 ...
13
votes
7answers
2k views

How can so many ETFs tracking the same index coexist?

I understand that different ETFs may cost different amounts of money per share, as you are buying a proportional amount of each company on the index, but why can two ETFs that cost roughly the same ...
13
votes
1answer
414 views

For higher returns, put money in fewer or more ETFs? w/rebalancing in the equation

I'm evaluating my long-term investing strategy. I am somewhat aggressive and want to stick with ETFs. Scenario A 60% Vanguard S&P 500 Index ETF (VOO) 40% Vanguard FTSE All-World Ex-U.S. ETF (VEU)...
11
votes
2answers
2k views

Why is an ETF, which is tracking foreign equities, ticking in my local time zone?

I have recently bought the N100 ETF, which tracks the Nasdaq 100. This is an Indian ETF. So, if it is tracking the Nasdaq 100, then why and how is it ticking in my (Indian) timezone?
11
votes
4answers
3k views

Is it a viable/good long term investment strategy to buy only index ETFs?

I'm in my late 30s living in the EU and for some time now, I've put the vast majority of my savings into a number of index ETFs. This is based on the philosophy that trying to beat the market is a ...
11
votes
6answers
5k views

Should I continue to invest in an S&P 500 index fund?

I am saving to buy a house in 5-8 years. This year I invested $40,000 in a prominent ETF which tracks with the S&P 500. So far, I've lost $3,250, that is the stocks are now worth $36,750. I save $...
11
votes
1answer
409 views

Is it possible to dispute a wash sale?

I recently sold some short term VTI shares at a loss (specific shares, not FIFO). With the proceeds, I purchased SCHB. My brokerage firm has adjusted my cost basis on the VTI shares due to a wash ...
11
votes
1answer
718 views

How does a synthetic ETF work?

A comment on my recent ETF-related question mentioned swap/synthetic ETFs. Most of what I can find on the web glosses over the mechanics. Can someone walk through what is happening behind the scenes? ...
10
votes
4answers
870 views

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 ...
10
votes
3answers
398 views

What kinds of exchange-traded funds (ETFs) should specifically be avoided?

This is related to my other question. There, I was asking what exchange traded funds I should consider for inclusion in my retirement portfolio. That got me thinking: What kinds of exchange-traded ...
10
votes
3answers
2k views

Couch Potato Portfolio for Europeans?

I recently came across the Couch Potato Portfolio concept and was happy to find an investment strategy that made sense to me. Its origin seems to be the Canadian version, and it has been translated ...
10
votes
2answers
1k views

Understanding differences between S&P500 index-tracking ETFs

I'm trying to understand the difference between S&P 500 trackers. Example: SPY IVV VOO They all have different prices (IVV being $1 more, on average than SPY, and VOO being about 50% of ...
10
votes
2answers
2k views

Which US market indexes (Dow/DJIA, S&P500, NASDAQ) include reinvested dividends?

Which major US market indexes (Dow/DJIA, S&P 500, NASDAQ) include returns from reinvested dividends, and which don't? Where can "total return" information be found for each index that doesn't ...
9
votes
2answers
779 views

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 ...
9
votes
3answers
2k views

What happens to investors' money in SPY ETF if State Street becomes bankrupt?

SPY is one of the most popular ETF tracking S&P500 index. If the ETF issuer State Street Global Advisors becomes bankrupt in a black swan event, what happens to investors' money? Is the money 100% ...
9
votes
3answers
552 views

Should I buy individual bonds for my retirement portfolio, or stick to funds/ETFs?

To avoid the fees on bond mutual funds or exchange traded funds I have been thinking of buying actual bonds inside of my retirement portfolio. Does that make sense or are there drawbacks to consider?
9
votes
3answers
791 views

Where are Bogleheadian World ETFs or Index funds?

The term bogleheadian is a bit ambiguous term but its simplification means low-cost, diversified, tax-efficient -- solutions. The slant is ETFs or index funds. William Bernstein wrote in some of his ...
9
votes
3answers
785 views

What to do with small dividends in brokerage account?

I just got paid some dividends from an ETF that I own. It is only $4, which is sitting as cash in my brokerage account. I'm aware that this is a very tiny amount of money in the grand scheme of things,...
9
votes
3answers
698 views

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?
9
votes
3answers
767 views

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 ...
9
votes
1answer
4k views

How does it work when the same ETF is listed on several stock exchanges?

I'm trying to understand how do ETFs listed in several exchanges work. Take VUSA, for example. It's listed in London, Zürich and Amsterdam. Same ISIN, so I assume it's exactly the same thing. If I ...
9
votes
1answer
237 views

What happens when your Canadian ETF shuts down?

I just got a notice that an ETF I own will termiate in 2 months if the shareholders don't vote for an extension. I understand that if I kept the shares until the termination date, I would get a ...
8
votes
8answers
723 views

Should I sell when my stocks are growing?

I have a collection of stock that on average have grown 8% in the last few months. Should I sell now? This is a normal account, meaning tax is of no help. I never understand why people sell while ...
8
votes
2answers
899 views

Is my “retire young” strategy a sensible one?

My goal is to have enough to retire at 40. I have 11 years to go (I'm 29) as of the past 15th. To be clear, I don't plan on retiring, maybe ever, but I want to have enough to just quit one day if I ...
8
votes
3answers
951 views

Long Term Cash-Equivalent ETFs for “cash” allocation

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 ...
8
votes
1answer
142 views

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 ...
8
votes
2answers
567 views

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 ...
8
votes
1answer
170 views

What are the differences in taxes rules for specialty ETFs such as GLD (Gold ETF) and general ETFs?

I am in the 15% tax bracket. In terms of short term hold and long term hold, I want to know what the differences in taxes rules for specialty ETFs such as GLD (Gold ETF) and general ETFs as are?
8
votes
2answers
1k views

Are TD e-Series Funds worthwhile, or am I better off with ETFs? Why or why not?

I'm looking at e-Series funds offered by TD. They have low MERs and seem to offer a good low cost alternative to traditional mutual funds. What do you guys think? Am I better off with ETFs? Why ...
8
votes
2answers
821 views

Should you diversify your ETF investments between companies?

I've found a number of interesting index funds, of which a lot are run by Vanguard. However, since I'm diversifying my investments between index funds, it seems sensible that I'd want to make sure all ...
8
votes
1answer
183 views

When a stock is replaced in an index, does the ETF incur a net loss?

Suppose I have invested in ETF VOO. This Vanguard ETF tracks the S&P 500. If a stock such as Goodyear (GT) that is contained in the S&P500 gets removed and replaced with another stock such ...
8
votes
2answers
171 views

Is there a website which shows indexes and their corresponding ETFs?

I am looking for a website which shows a list of indexes and their corresponding ETFs. Specifically, I'm looking for a list where the first column lists indexes from around the world and the second ...
8
votes
1answer
464 views

Starting off as an investor

For 2 years I am alternating between 4 months of work and 4 months of school, so for the first time in my life, I have a lot more money than I need. I will be graduating in 15 months and am looking ...
7
votes
5answers
2k views

Roth IRA = Emergency Fund. Any Safe Investments?

I've been building my emergency fund through automatic deposits into a Roth IRA at TDAmeritrade. This has been working well, since the money is out of sight, out of mind, and I can easily withdraw it ...
7
votes
6answers
3k views

Losing Money with Norbert's Gambit

In attempt to avoid the usual 1.5-2% exchange fees levied by brokers, I perform Norbert's gambit: I purchase DLR.TO in CAD (Canadian dollars) from TSX, journal it over to DLR.U.TO, and then sell the ...
7
votes
3answers
7k views

Retirement Funds: Betterment vs Vanguard Life strategy vs Target Retirement

I'm a 20 something grad student and would like to open a hands off retirement account with beta exposure to the market and would make monthly contributions. I'm fairly illiterate when it comes to ...