Personal Finance and Money Stack Exchange
Personal Finance and Money Stack Exchange

Questions tagged [etf]

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

DEFINITION of 'Exchange-Traded Fund - ETF'

A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.

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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 game for professionals and fools, so since I'm…
Michael Borgwardt
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Will an ETF increase in price if an underlying stock increases in price

If there is an ETF that is made up of 5 stocks and let us say one day, one of these stocks shoot up by 10%, will the underlying ETF also shoot up, even if there was no additional buying activity for the ETF itself?
Victor123
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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 purchased, i.e. could it have a negative price, which…
NingNing
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Does the expense ratio of an ETF cover trading costs incurred by tracking the index?

ETFs report annual expense ratios, such as 0.14% for Vanguard Total World ETF. Let's say that I have invested $10,000 in the fund. I suppose that each year $14 is subtracted from my investment and paid to Vanguard, correct? Does Vanguard then use…
marty24
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How does an inverse ETF work

How does an inverse ETF work? Does the underwriting company issuing the ETF just short the shares of the underlying(s)? Or do they purchase(sell) the near month put(call) options and keep rolling them over? For example, let us consider the inverse…
Victor123
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What happens to an ETF if one of the companies in the ETF gets aquired?

I own junior gold miners ETF - GDXJ. If one of the mining companies in the ETF gets bought by a bigger miner, what happens to the ETF? Does it go up? Do ETF investors get some kind of cash in terms of a dividend somehow?
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Why is there a market for high dividend ETFs?

The ETF paying the highest dividend is around 4%. However, the growth is low, maybe 70% for past 5 years. On the other hand, some tech ETFs pay only a 2% dividend but they have a 150% growth rate over the past 5 years. What would make people buy…
user144627
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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 is a good price to buy it? Are there such simple…
Zoltán
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Market price vs NAV for ETF

I was checking a description for the ETF and there was a comparison of how many times the market price was above or below NAV. What does this tell me about the ETF and why would I need to care about it? NAV is the value of the holdings inside of the…
Medan
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Are ETFs unaffected by volume of people trading it?

My understanding of ETF is that they contain a basket of various stocks, and they usually track pretty closely to an index. So their share price depends on how well the basket of stocks are doing. In this case, does it mean that the share price of…
xenon
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For an ETF, do different methods of weighting securities improve returns?

[Source:] The S&P 500 is an index that weights 500 companies in order of their market capitalizations – if the market values company A more than company B, then company A is weighted more heavily in the index. But this isn’t a good investment…
user10763
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How can I most productively check for overlaps between ETF holdings?

My grandparents just realized that NASDAQ and S&P500 overlap as listed in this Quora post dated May 11 2017. How can they see overlaps more productively than copying and pasting each index's page to Excel, then using some Excel tool? Your…
user10763
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What does negative holdings in ETF mean?

For example in this ETF, the full list of holdings as of today is: TD International Equity Index ETF (TPE) 99.88% Cash and Cash Equivalents 88.88% JPY Currency 23.53% CHF Currency 3.37% SGD Currency 1.14% HKD Currency 0.06% USD…
Tomato
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What is Inflow and Outflow of money in the context of ETFs

There are several articles and other such references that talk about cash flowing in and out of ETFs. The last link also hints at what that might mean, but I want to know more in detail. If they are exchange traded, how/when are new units added? I…
Karthik T
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Is it important to read the entire prospectus before investing in an ETF?

One must understand what one is buying when making an investment. When investing in an ETF, must one always read the entire prospectus? If not, what are the boilerplate sections of ETF prospectuses that can be safely skipped? What are the must-read…
Flux
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