Types of ETF's and its Investment Strategies

Posted by John Duke on November 21st, 2019

ETF or an Exchange Traded Fund is a collection of securities such as stocks, bonds, commodities and many other investment types that are often tracked on an underlying index. Also, ETF's can be invested in any number of industry sectors and can use various strategies. ETFs are very much similar to the mutual funds, they are listed on exchanges and an ETF share can be traded multiple times throughout the day. If you are looking to invest in an ETF then you must consider ETF industry strategies to attain profit from your investment. An Exchange-traded fund is a marketable security that comes with an associated price and allows the fund to be easily bought and sold.

Types of Exchange-traded funds

There are many types of exchange-traded funds available to the investors that can be used for speculation, income generation, and price increment and to offset the risk of investment into the portfolio of the investor. The following are explained some different types of ETF's.

• Bond ETFs: ETF bonds might include corporate bonds, government bonds and local and state bonds that are also called municipal bonds.
• Industry ETF's: Industry ETFs track a specific industry such as banking, technology, gas or oil sector.
• Currency ETFs: These types of ETFs are used for investing in foreign currencies such as the Canadian dollar or Euros.
• Commodity ETFs: These ETFs are invested in commodities that include gold or crude oil.
• Inverse ETFs: These ETFs try to earn profit from stock declines.

ETF investment strategies for the investors

Investors of ETF need to follow some of the industry's strategies for making a proper investment that helps them in earning the profit. After learning the Exchange-traded fund investment strategies you will feel much confident in making your investment in the ETF. Here are mentioned some of the strategies for investors.

• Invest in the market with ETFs: It is good to invest in stock market. There are ETFs available for various companies. You can check the stock value and can invest by tracking the volatility index.
• Use ETFs to gain exposure to an industry: ETFs, unlike other investment options, can be sold multiple times throughout the day. They are easy and help in gaining exposure to any industry to identify the sequence of change in their investment options.
• Invest in commodities without investing in commodities: If as an investor you don't have a space for livestock then you can add a commodity to your ETF portfolio and get quick exposure to the commodity market.
• Foreign ETFs give you access to the international market: If you fear to invest in the foreign market then try your hands-on foreign ETFs.

Knowing ETF industry strategies gives you instant exposure to the investment market.