absolutezero wrote:Mike4 wrote:absolutezero wrote:Mike4 wrote:
Thanks for all this. As a hobby stock investor I had no idea there were indexes for each sector and trackers tracking them!
With any ETF it's worth checking what index it actually tracks and that the 'tracking error' (broadly the difference between the index and the ETF itself) - usually next to nothing.
All this is found on the information sheet from the ETF provider.
ETFs!
A scary term and something I've gone out of my way to swerve so far in my investing career. "Only invest in what you (think you) understand" is one of my personal maxims. Even so I've still managed to buy one or two funds which turned out not to be what I thought I was buying!
What's so scary about ETFs?
It's just a fund that is traded on an exchange.
For what it's worth, I only buy 'physical' ETFs rather than 'synthetic'.
Physical ETFs actually hold the shares they track.
Synthetic uses some trading voodoo to replicate the index.
You're making it worse!
What about 'open ended' and closed ended' funds? Aren't those terms associated with ETFs?
Maybe they ARE easy to understand but until now I've seen no need.