What are the Cost Benefits of Trading ETF's?
- Low expense ratios
- Modest brokerage costs
- Very Liquid
- Tax-efficient (low stock turnover)
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Exchange Traded Funds enable
investors to buy
a specific type of security (e.g. small-cap growth, mid-cap
value, etc.) as defined by the holdings in a given
index(e.g. the S&P 500, the Dow, the Nasdaq 100 etc) . ETF's
are composite mutual funds with unique ticker symbols which act
as surrogates for various market indices or segments .
For example, when you buy an S&P 500 exchange
traded fund (such as S&P 500 Depository Receipts or "SPDR Trust Series
1", ticker symbol SPY) the ETF captures portions of shares of the
stocks in the S&P 500 index.
ETF's are also available within specific industry sectors (e.g.
XLK, for the IT industry), if you want a pure play of a
certain group of stocks. |
Why Trade ETF's?
ETF's facilitate targeted trading e.g. the implementation of
strategies such as "buy
large-cap growth", "buy large-cap value" etc., when a
group is
exhibiting market strength.
ETF's avoid the risk of picking individual stocks or
sector funds.
How are ETF's Traded?
Signalert and Appel Asset Management managers analyze moving average
trends,
relative strength indicators, chart patterns and price spreads for each fund,
as well as trends of the underlying indices.
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