Thursday, July 14, 2011

ETFs Vary

ETFs, or exchange traded funds, vary a good deal.

They may differ when they track an index set by securities earnings rather than by securities market weightings. That will make a difference. Index make-ups may also vary within group types. The number of shares in an index is also important, as the size and trading value of those shares will then vary.

Trading volume is important as liquidity helps traders using ETFs. And there are many who periodically want their dividends reinvested. It’s important they get better pricing on small purchases.

Even if the ETFs use the same stock indexes, underlying costs of operation may differ. Lower-cost is a better choice. ( See the Earl J. Weinreb NewsHole® comments.)

No comments:

Post a Comment