ETF are securities that can be traded in a stock market. They are marketable securities so their prices keep changing on a daily basis. They carry low fees and have a high liquidity rate. It has an underlying index which can be gold bonds, normal bonds, stock and any other marketable securities. Since the price keeps changing throughout the day they do not have any fixed Net Asset value in general. This is very popular among investors as they are more liquid in nature than any other marketable securities and they are easily to purchase and sale. These are the ETF fundamentals that make ETFs a much sought forward investment plan.
Classification of ETFs:
We can classify ETF into 7 ETF models.
- The Global Equity Model help to sale and purchase ETFs in the global market.
- The Short Duration Fixed Income model have a lower time period hence attract low risks.
- The Global Fixed Income Model is considered to be the ETF model with the highest amount of index.
- The Global Multi-asset Income model is so developed to give the highest amount of interest earned.
- The Funds Model or the Hedge Fund Model help to deal with those funds which need high risk management.
- The Private Equity Model mainly deals with the private equity in the private equity models.
- The Real asset Model deals with tangible assets.
Investing your funds in a security market brings along with it its own set of risks that need to be dealt with. Professionals come up with ETF strategist that can help an investor to make sound decisions while investing their funds. Professionals who deal with the security market can make strategies based on their experience and by understanding the market scenario. These strategies decrease the risk factors.
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