Nagpur Stock：Introduction to Exchange-Traded Funds (ETFs)

ETF Type

Description

Underlying Assets

Typical Investor Use

Major Advantage

Major Disadvantage

Actively Managed ETFs

Portfolio managers actively buy and sell securities, including stocks, bonds, futures, and more.

Various securities chosen by the fund manager

Seeking to outperform a benchmark

Potential to outperform benchmarks through experienced management.

Higher expense ratios due to active management

Bond ETFs

Invest in one or more types of bonds

Government, corporate, or high-yield bonds

Diversification, income generation

Provides stable income through dividends from bonds.Nagpur Stock

Susceptible to interest rate risk, affecting bond prices inversely

Commodity ETFs

Invest in physical commodities or commodity futures

Gold, silver, oil, or other commodities

Diversification, inflation hedge

Offers a hedge against inflation and an alternative to stocks and bonds.

Can be volatile, influenced by international climate, political, and economic factors

Crypto ETFs

Track the performance of cryptocurrencies by holding them or with futures

Bitcoin for spot bitcoin ETFs; bitcoin and ether futures

Exposure to cryptocurrency markets

Provides exposure to cryptocurrency markets without needing to directly buy or store digital currencies.

Highly volatile and can be impacted by regulatory changes and problems in largely unregulated underlying markets

Currency ETFs

Track the performance of a currency or currency basket

Currencies

Hedging, speculation

Useful for insuring against currency risks or speculating on foreign exchange moves

Forex markets can be extremely volatile and influenced by sudden global events

Dividend ETFs

Focus on stocks that pay consistent dividends

Dividend-paying stocks

Income generation

Offers a regular income stream from dividends.

Depend on the health of dividend-paying companies that could cut dividends in tougher economies

ESG ETFs

Invest in companies that meet environmental, social, and governance criteria

Stocks or bonds of ESG-friendly companies

Aligning investments with values

Investing aligned with personal values on environmental, social, and governance issues.

Potentially limited exposure to certain industries; need to ensure ESG claims are legitimate

Futures-Based ETFs

Invest in futures contracts (contracts to buy an asset in the future at a preset price)

Futures contracts on various assets

Diversification, hedging, speculation

Provides exposure to various asset classes without needing to directly own the assets.

Futures contracts can be complex and have costs rolling over contracts and tracking errors

Leveraged and Inverse ETFs

Multiplied returns on indexes (whether wagering for or against the index going up)

Short selling or long positions in index funds

Short-term trading, hedging, speculation

Offers potential for significant gains in a short period if the market moves as predicted

High risk of significant losses, especially if held for more than one day because of compounding effects

Options ETFs

Use options strategies to generate income or manage risk

Options contracts

Hedging, speculation

Benefits of options strategies to generate income or hedge against portfolio risks

Strategies are complex and may lead to significant losses if not managed well, or if you don't know options well when buying ETF shares

Preferred Stock ETFs

Invest in securities that combine aspects of stocks and bonds seeking dividend yields

Preferred stocks

Income-seeking and institutional investors wanting diversification

Can offer attractive dividend yields and higher claims on assets than common stocks

Less potential for capital appreciation compared to common stocks; sensitive to interest rate changes

REIT ETFsGuoabong Wealth Management

Invest in real estate investment trusts

REITs, which own income-generating real estate

Diversification, income generation

Provides exposure to real estate without needing to directly manage properties

Sensitive to changes in interest rates, which can affect real estate prices and occupancy rates, lowering them precipitously

Sector or Industry ETFs

Focus on a specific sector or industry

Stocks from companies within the sector or industry

Targeted exposure to a specific market segment

Can focus on trends and industries you think are likely to rise

Higher risk of volatility due to exposure to a single sector or industry

Volatility ETFs

Provide exposure to market volatility

VIX futures or other volatility-linked derivatives

Hedging, speculation

Useful for hedging against market downturns when volatility is expected to rise

Can have severe losses, especially in stable or rallying markets

Agra Stock