ETFs and index funds examined
Wednesday, February 15, 2012
A recent report from ETF trends reveals the growth experienced by exchange traded funds is being driven partly by investors who are shifting from transitional index funds to ETFs.
The reason many investors are making the switch can be attributed to the ability to buy and sell ETFs during the trading day, however, some analysts have expressed concern that investors may overtrade ETFs and harm themselves in the process, the news source states.
“We are starting to see products offered in some areas such as emerging markets and certain commodities, for example, where access is not available through an index fund,” Dan Draper, global head of ETFs at Credit Suisse, told the Financial Times in a recent story.
ETFs can come in different forms. Commodity ETFs have been a boost to individual investors, as they can provide exposure for certain areas of the market that may previously have been difficult to reach, according to a separate report from ETF Trends.
Only a few years ago, before commodity ETFs were offered, the average individual investor did not have the ability to invest in gold or currencies with one transaction.
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