EXCHANGE TRADED FUNDS (ETFs)
Investing in ETFs combines the diversification of mutual funds with lower investment minimums and real-pricing. If you’ve ever traded an individual stock, then buying and selling an ETF will feel familiar because it’s traded the same way. An ETF is a collection of tens, hundreds or sometimes thousands of stocks or bonds in a single fund. Exchange traded funds and mutual funds share many similarities but we have few distinguishing characteristics that may make ETFs more attractive than mutual funds to some investors, this includes; real-time pricing and lower investment minimums when investing. Exchange traded funds is of different classifications;
- Bond ETFs
Here in Providus Capital Ltd, these above mentioned classes works together in your portfolio as an investor through different ways;
- Bond ETFs enables investors to receive income from the interest you earn on your investment. It also moderates the risks involved with the stock portion of your portfolio. Note: When investing for shorter period of time, consider putting more money into bonds than stocks.
- Stock ETFs enables investors grow their money over longer period of time, with higher rewards in exchange for taking more risk.
- International ETFs enables investors in going beyond U.S. borders while targeting more opportunities from other developed and emerging countries, which even add more diversification to your portfolio.
- Sector ETFs enables investors focus more on specific factors like energy and real estate which grows their money faster by investing more in a sector they think may be on the rise. The market price is determined by the midpoint between the bid and asked prices as of the closing time in stock exchange on business days.