Fund Hot News

What is an exchange-traded fund (ETF)?

An ETF Investment is an exchange-traded fund, a type of investment vehicle traded on stock exchanges. ETF stocks are traded like single shares, with the prices moving throughout the day.

An ETF typically holds assets such as stocks (typically a mixture of investments in unit trusts and investment trusts) or bonds. Many ETFs in fact track an overall index, such as the S&P 500 or MSCI EAFE. An ETF’s overall value is usually around the same price as the net value of the asset value of its underlying assets; if it is tracking an overall index, its value typically moves in line with changes in that index. Only “authorized participants” (typically large investors) are actually permitted to deal directly with the ETF in terms of buying or selling shares from or to the fund manager. Such transactions usually involve the purchase or sale of “creation units” (i.e. groups of tens of thousands of ETF shares. Individual investors then go through these “authorised participants” to buy ETF stocks and to formulate their ETF trading strategies. Continue reading ‘ETF Investment – What is it and How Does it Work?’ »

After the market turmoil of the past two or three years (depending on where you live on this planet), trying to get a head start lead on future growth opportunities has never been more difficult. With credit remaining tight for smaller companies, the advice of the past where advisors insisted on pouring thousands into small-cap funds or individual companies may not be such a wise recommendation. In fact, even large cap companies have seen their credit ratings cut and, as a consequence, are paying higher rates on their bonds and other debt, a harsh reality that cuts deep into bottom-line profitability.

In fact, there has been such a monumental shift in the way that corporate American lends money that what was formerly considered higher rates based on higher risk is now the only rate out there… and that higher rate is only available for the strongest companies.

But if an investor has little or no faith in the fixed-income asset class (or more likely, little understanding of the class) and prefers to steer toward the equity class, where should they turn? Continue reading ‘Why Dividend Funds Will Outperform This Year’ »