Most ETFs are essentially index funds, which is to say they track the performance of a specific stock or bond market index or other benchmark, or they try to replicate a specific market, such as the technology market or the automotive market. ETFs can also be modeled after a specific commodity such as silver or copper.
ETFs offer some particular advantages that make them more attractive to some investors than traditional open-ended investments because they are more diversified.
A lot of investors like ETFs because they are very flexible and inexpensive. Not to mention they have a few tax benefits. An ETF itself does not require the purchasing of securities, which means they are not taxable gains that can be passed on. However, they do have have to be purchased through a broker.
Investors who do want to consider buying ETFs as an investment opportunity, should consider venturing outside the confines of the United States. Many emerging markets, like Malaysia, Peru, Brazil, India and Singapore, have significant value and potential and should not be overlooked. –torrance stephens, ph.d.
