Category Archives: ETF

If you want to invest in healthcare, buying a healthcare ETF is the easiest way to get started without studying individual firms.  Healthcare ETFs invest in a diversified portfolio of stocks from firms that provide medical services, manufacture medical equipment, and medications, provide medical insurance, or help patients access healthcare.  United Health Group Inc. (UNH), Pfizer Inc. (PFE), and Merck & Co. Inc. are three significant healthcare businesses.  The healthcare industry is noncyclical since most medical services and goods are essential rather than discretionary expenditures.   Why should you invest in the Healthcare Industry? Healthcare has a lot of room for expansion. As individuals live much longer than before, medicine faces a slew of diseases to combat, including cancer, heart disease, Alzheimer's disease, stroke, and various other ailments.   This also includes combating new-age diseases like COVID-19 and illnesses that have yet to be discovered. In addition, healthcare spending in the United States has been above planned expenditure.   According to Peterson-Health KFF's System Tracker, medical spending per capita increased by 3.7 percent yearly from 2010 to 2019, compared with 3.4 percent for the US economy. As a result, healthcare ETFs can be a good fit for a defensive portfolio.  You can acquire a broad spectrum of the healthcare sector or even narrower areas with a healthcare ETF. After evaluating your goals, find the group of stocks you want to own in either case.   Unlike buying individual companies, an ETF also provides diversity and helps in lowering your risks. Since the healthcare industry is broad, the division is possible into sub-sectors based on the kind of firms that operate within it.   Except for geared ETFs and funds with under $50 million in assets under management, the healthcare ETF universe consists of around 34 different ETFs that trade in the United States (AUM).   So, you can invest in healthcare in a variety of ways, and a healthcare ETF can offer exposure to some of the following sectors:  How to choose a healthcare ETF?   Here are some parameters to consider before selecting an ETF: Sub-sector exposure Track record of the ETF Expense ratio With $33.95 billion in assets, the Health Care Select Sector SPDR Fund XLV is the largest Healthcare ETF. The best-performing Healthcare ETF in the previous year was LABD, which returned 105.54 percent.   The PSYK ETF PSYK was the most recent Healthcare ETF to be launched on 31 January 2022.  Top ETF performers according to etf.com.  TickerFund NameTrailing 30-days price TR changeBISProShares UltraShort NASDAQ Biotechnology7.14%XHESPDR S&P Health Care Equipment ETF5.62%XHSSPDR S&P Health Care Services ETF3.36%LABDDirexion Daily S&P Biotech Bear 3X Shares3.27%PSCHInvesco S&P SmallCap Health Care ETF2.46% Bottom ETF performers, according to etf.com.  TickerFund NameTrailing 30-days price TR changeLABUDirexion Daily S&P Biotech Bull 3X Shares-14.97%PSILAdvisorShares Psychedelics ETF-9.14%PSYDefiance Next Gen Altered Experience ETF-8.24%BIBProShares Ultra NASDAQ Biotechnology-8.09%CNCRLoncar Cancer Immunotherapy ETF-4.92% If you want to invest in healthcare, you have a few possibilities based on the sub-sector that you want to focus on. If you're unsure which one to buy, you can buy an ETF that tracks the entire industry and acquire overall exposure.   While you don't need to be an expert in investing in an ETF, some investors prefer to stick to diversified asset index funds, like those built on the S&P 500 index, leaving trading and fund selection to the professionals.  FAQs What are healthcare ETFs? Healthcare ETFs invest in a diversified portfolio of stocks from firms that provide medical services, manufacture medical equipment, and medications, provide medical insurance, or help patients access healthcare. United Health Group Inc. (UNH), Pfizer Inc. (PFE), and Merck & Co. Inc. are three significant healthcare businesses. What is the best-performing healthcare ETF? Here are some of the best-performing healthcare ETFs: ProShares UltraShort NASDAQ Biotechnology XHE SPDR S&P Health Care Equipment ETF XHS SPDR S&P Health Care Services ETF LABD Direxion Daily S&P Biotech Bear 3X Shares PSCH Invesco S&P SmallCap Health Care ETF What is ETF in healthcare? A healthcare exchange-traded fund (ETF) is an ETF that invests stocks of companies that primarily provide medical services, equipment or drugs, or medical insurance. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed bitcoin ETFs. In this article, we will discuss what are energy ETFs in India. Energy ETFs? An exchange-traded fund (ETF) that offers traders access to the energy industry is known as an energy ETF.  Like other exchange-traded funds, Energy ETFs invest in oil, gas, and alternative energy firms to track a broad sector index, sub-sector, commodity, or another asset.  The energy sector is a large portion of the global economy that affects almost every business. Practically every investor with a well-balanced portfolio has some exposure to energy firms.   The fact that energy comprises a significant representation in broad market averages such as the S&P 500 demonstrates its importance. Energy ETFs, as previously said, are security baskets that allow people to invest in the energy industry without having to pick specific firms.   Crude, gas, and alternative energy ETFs invest in firms participating in the discovery, production, distribution, haulage, and heavy industry of energy and related products, as well as those that are engaged in the discovery, manufacturing, distribution, logistics, and production of energy and associated products.   The MSCI World Energy index, for example, monitors all companies in the energy sector that are part of the MSCI World index. As a result, a global energy ETF allows you to invest in the world's largest energy corporations.  Energy ETF shares, like stocks, can be acquired on a stock exchange. Unlike mutual funds, there is no loading on ETFs, and the fees are often lower. Energy ETFs with a specialized focus encompass various industries, locations, and risk profiles. Both conservative and adventurous investors have options.   The energy sector involves a highly complex and sophisticated network of enterprises producing and transmitting the energy required to power daily life and business.  Global energy supply and demand is a massive element in sector performance, yet demand isn't static. When oil and gas prices are high, producers usually outperform, whereas they earn less when their value falls.   On the other hand, oil refiners can benefit from lower crude prices by lowering the cost of feedstock used to make petroleum products like gasoline.  However, one important thing to note here is that renewable energy producers and providers may not be factored into the energy sector; thus, clean energy ETFs can be used to invest in such businesses. Source: Pexels What are some benefits of investing in energy ETFs in India?  Energy ETFs offer access to various firms to invest in without requiring you to pick them individually. It is a bundle of energy assets helping you to avoid market risk, commodity price risk, and geopolitical risk, which are all risks connected with investing in the energy sector.  One can also select specialized ETFs based on investment objectives and specific requirements. For example, if users wish to invest in new kinds of energy, ETFs allow them to choose between clean energy ETFs and classic energy businesses that deal with petroleum, gasoline, and lignite.  Energy ETFs have $80.18 billion in assets under management, with 55 ETFs trading on US exchanges. The cost-to-income ratio is 0.68 percent on average.  With $35.91 billion in assets, the Energy Select Sector SPDR Fund XLE is the largest Energy ETF. The best-performing Energy ETF in the previous year was NRGU, which returned 156.99 percent.   On January 20, 22, the Direxion Daily Oil Services Bull 2X Shares ONG, the most recent ETF in the Energy industry, was launched.  Let's now look at some top and bottom performers Top ETF Performers according to etf.com  Bottom ETF Performers according to etf.com  ETFs provide diversification, but there are hazards that you need to take into account. Any specialized sector-based ETF, such as one that follows energy companies, might increase portfolio volatility, so doing due diligence before making any investment decisions is imperative.   Investors should read the prospectus, especially when dealing with volatile commodities like energy. It will provide a decent understanding of associated costs and the securities to which the ETF exposes you. FAQs What are Energy ETFs? An exchange-traded fund (ETF) that offers traders access to the energy industry is known as an energy ETF. Like other exchange-traded funds, Energy ETFs invest in oil, gas, and alternative energy firms to track a broad sector index, sub-sector, commodity, or another asset. What are some benefits of investing in energy ETFs in India? Energy ETFs offer access to various firms to invest in without requiring you to pick them individually. It is a bundle of energy assets helping you to avoid market risk, commodity price risk, and geopolitical risk, which are all risks connected with investing in the energy sector.  Is energy ETF a good buy? Energy ETFs invest in oil, gas, and alternative energy firms to track a broad sector index, sub-sector, commodity, or another asset. The energy sector is a large portion of the global economy that affects almost every business. Practically every investor with a well-balanced portfolio has some exposure to energy firms. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the previous article, we discussed Marijuana ETFs. In this article, we will discuss ESG ETF. An ESG investment is a socially responsible investment that considers a company's impact on the environment, its shareholders, and the planet in addition to financial rewards.   Investors have recently become interested in the financial efficiency of ESG stocks. Many companies with good ESG track records demonstrated lower fluctuation than their non-ESG rivals during the market upheaval caused by the COVID-19 epidemic.   ESG investment was justified for many investors because good corporate behavior leads to more significant financial results.  ESG ETFs?  ESG stands for Environmental, Social, and Governance - the three criteria to adjudge the company's sustainable performance.   E- Environmental addresses the effect of the company's business on the planet through Climate change policies  Greenhouse gas emissions   Carbon footprint   Water use and conservation and waste disposal   Renewable energy sources   Recycling and disposal methods   Green products, technologies, infrastructure, and so on.  S-Social addresses the company's responsibility toward society, its employees, and its customers. Employee dealing and remuneration  Employee Skills and Development  Employee Security and sexual harassment deterrence  Social inclusion  Ethical supply chain sourcing  Mission or higher purpose  Consumer service   Whistleblower protection programmers  Public stance on social justice matters  G - Governance relates to the governance position and standards in the firm.  Executive remuneration and benefits and their link with long-term corporate value  Ethical governance policies.  Social diversity in top-level management.  Presence of conflict of interest in the board.  Shareholders' Influence on the Board  Tenure of board members  Mutually exclusive responsibilities of chairman and CEO  Communication with shareholders is transparent.  Addressing shareholder grievances.  ESG’s performance evaluation can be done with the help of corporate reporting and third-party sources like MSCI ESG Ratings and Sustain Analytics ESG Ratings. Source: Pexels Why choose ESG ETF?  Environmental, social, and governance challenges are essential threats to operations and profits in every industry. Hence firms segregated on such grounds are bound to perform well in the foreseeable future.   Companies trying to address ESG issues will perform well and have fewer disruptions in business routines. They face less scrutiny from regulators and produce reliable financial returns resulting in a lower risk for investors.  ESG-compliant companies also produce superior financial returns. Take, for instance, JUST Capital's JUST U.S. Big Cap Diversified Index (JULCD), which analyses the performance of large, publicly traded firms with substantial environmental, social, and governance (ESG) scores.   It comprises half of the Russell 1000 index's large-cap public firms. Still, it excludes those without a demonstrable dedication to employee well-being, valuable goods, positive environmental performance, and strong communities. For three years, JUST Capital's JULCD index has outperformed the Russell 1000.  Thus, ESG-compliant investing helps keep portfolio risks at bay and generate competitive returns.  What are some risks of ESG ETF investing?  There are no universally accepted ESG standards, thus leaving a scope of discretion to the ESG scoring agencies. For instance, some ESG funds also hold companies manufacturing tobacco!  As ESG is a comparatively newer concept, no long-run data proving its efficacy is available.  Companies may no longer report sustainability data of their own volition. Any reduction in the availability of high-quality (investable) ESG enterprises results from a general dereliction of ESG qualities.  ESG ETFs have a total asset under management of $159.76 billion, with 50 ETFs trading on U.S. exchanges. The expense ratio is 0.36 percent on average.  With $48.64 billion in assets, the Vanguard Information Technology ETF is the largest ESG ETF. FLCA was the best-performing ESG ETF in the previous year, with a gain of 22.43 percent.   On 11/08/21, the iShares ESG Advanced Investment Grade Corporate Bond ETF ELQD became the most current ETF in the ESG area.  Let us look at some top gainers and losers Top ETF performers according to etf.com  Bottom ETF performers according to etf.com There is no paucity of money or interest going into ESG investment. ESG investments will stay valid and expand further, thanks to drivers of change like E.V.s and the effect of the coronavirus.   That implies it's time for investors to start paying notice. A fantastic strategy to assure portfolio success is to align your money with your values. FAQs What is an ESG investment? An ESG investment is a socially responsible investment that considers a company's impact on the environment, its shareholders, and the planet in addition to financial rewards.   What are some risks of ESG ETF investing? There are no universally accepted ESG standards, thus leaving a scope of discretion to the ESG scoring agencies. For instance, some ESG funds also hold companies manufacturing tobacco!  As ESG is a comparatively newer concept, no long-run data proving its efficacy is available.  Companies may no longer report sustainability data of their own volition. Any reduction in the availability of high-quality (investable) ESG enterprises results from a general dereliction of ESG qualities.  Consult our expert advisor to get the right plan for you TALK TO AN EXPERT

Earlier we read about the three costliest ETFs regarding their expense ratio. In this article, we will know the three cheapest ETFs regarding their expense ratio.  Two of the most successful long-term investment vehicles are mutual funds and exchange-traded funds (ETFs). You may even have some of these in your pension fund.   However, a part of your portfolio is dedicated to a charge termed an expense ratio each year. It's critical to understand the costs you're paying no matter what you're investing in.  And, given the prevalence of mutual funds and exchange-traded funds (ETFs), many of us pay an annual expense ratio out of our portfolios.  What is an Expense Ratio?  The fee that mutual funds or exchange-traded funds charge investors is the Expense ratio. This charge covers the costs of management, asset allocation, marketing, and other services.   These charges are calculated as a portion of an investor's annual cost. ETF expense rates are often less than 1%. That means you spend less than $1 per year on expenses for every $100 you invest. Three cheapest ETFs in terms of their expense ratio Rank ETF SymbolExpense Ratio1 JP Morgan Betabuilders U.S. Equity ETFBBUS0.02%2 Vanguard Total Stock Market ETFVTI0.03%3 iShares Core S&P 500 ETFIVV0.03% 1. JP Morgan Betabuilders U.S. Equity ETF  BBUS invests in the top 85% of stocks in the US equity market by market capitalization across all sectors. The fund includes large-cap and mid-cap stocks.   Common shares, preferred shares, and REITs are forms of equity securities. BBUS, part of the "BetaBuilders" suite, offers low-cost, plain-vanilla access to US stocks, except for small-cap enterprises, which can be used as a primary investment or complement BBMC or BBIN.   The fund might invest up to 20% in futures to track the index more closely. The index recalibration is done every three months. The MSCI ESG Fund Rating for JPMorgan BetaBuilders U.S. Equity ETF is AA, with 7.61 out of ten Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsBBUS10.62%17.92%--MSCI USA IMI12.14%17.85%15.10%14.24% The fund invests entirely in the United States.  Top 10 Holdings  Source: etf.com BBUS details  BrandJPMorganExpense Ratio0.02%YTD Return-7.79%AUM$1.05BNumber of Holdings632Avg. Spread ($)$0.04Average Daily $ Volume$8.51M 2. Vanguard Total Stock Market ETF  VTI is a strong option for buyers or investors looking for broad equity exposure across the market, including micro-caps. The fund is impartial, with no gambles on businesses, sizes, or styles.   The fund is handled passively and is always fully invested. The ETF has tracked various broad indexes over the years, including Dow Jones, MSCI, and, as of June 2013, CRSP. Its current index closely resembles the MSCI benchmark.   Like all other Vanguard ETFs, portfolio transparency is reported monthly rather than daily. The MSCI ESG Fund Rating for Vanguard Total Stock Market ETF is AA, with 7.36 out of 10.  Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsVTI3.94%15.79%13.74%13.58%CRSP U.S. Total Market6.94%16.74%14.33%13.73% The fund invests entirely in the United States.  Top 10 Holdings  Source: etf.com  VTI details  BrandVanguardExpense Ratio0.03%YTD Return-7.81%AUM$285.63BNumber of Holdings4033Avg. Spread ($)$0.03Average Daily $ Volume$1.22B 3. iShares Core S&P 500 ETF  IVV, one of the numerous ETFs that reflect the S&P 500 Index, provides good exposure to large-cap stocks.   Despite popular belief that the S&P 500 index gives pure market-cap access to the US market, the index's committee has the authority to omit individual companies.   IVV also has a smaller skew than our benchmark because it trades at a lower market capitalization. Nonetheless, our research shows that these discrepancies are mainly academic, as the fund provides excellent coverage.   IVV is organized as a 1940 Act Fund, which, in comparison to other structures, makes it more appealing to buy-and-hold investors because dividends are investible.   The fund issues daily positions. The MSCI ESG Fund Rating for the iShares Core S&P 500 ETF is AA, with 7.79/10.  Performance  Performance [as of 18/03/22]1 year3 years5 years10 yearsIVV8.98%16.70%14.35%13.97%S&P 50011.53%17.54%14.91%14.25% The fund invests entirely in the United States.  Top 10 Holdings  Source: etf.com IVV details  BrandiSharesExpense Ratio0.03%YTD Return-7.13%AUM$324.85BNumber of Holdings507Avg. Spread ($)$0.03Average Daily $ Volume$3.99B FAQs What ETF has the lowest fees? JP Morgan Betabuilders US Equity ETF   Vanguard Total Stock Market ETF   iShares Core S&P 500 ETF What is the expense ratio? These charges are calculated as a portion of an investor’s annual cost. ETF expense rates are often less than 1%. That means you spend less than $1 per year on expenses for every $100 you invest.   The fee that mutual funds or exchange-traded funds charge investors are Expense ratio. This charge covers the costs of management, asset allocation, marketing, and other services.    How much should I invest in my child’s education?   Saving money without a target is challenging. As soon as your child decides what they want to pursue, look out for colleges or universities that offer the course and do your research to find out the tuition fees and accommodation costs to get an idea of the total cost of education and then explore saving plans that can help you accumulate the amount you need for college.   How can I save for my child’s higher education?   It is extremely important for parents to realize that their saving needs to beat inflation for them to afford the future cost of education. They should choose an asset class that provides them with inflation-beating returns. In most cases, mutual funds offer better returns than other investment vehicles, which can help parents save for their child’s education. 

ETFs, like index mutual funds, monitor a benchmark index passively. As a result, the top ETFs have the lowest expense ratios. If you're looking for an ETF that mirrors the S&P 500 Index, the one with the minor expense ratio is likely to be the best option. If the expense ratios are close, you should choose the one with the most assets under management. If you're searching for the best ETFs to invest in, the largest ETFs by assets under management are a great place to start. Unlike their mutual fund siblings, exchange-traded funds (ETFs) with the most money invested in them can have benefits over ETFs with fewer assets under management.  The total market value of the securities that a person or corporation manages on behalf of clients is known as assets under management (AUM).   The standards and methods for assets under management differ from firm to firm. Some financial firms calculate AUM by including cash deposits, unit trusts, and money. Others limit it to funds under permissive management, in which the investors deputized trading rights to the corporation.  One of the most important characteristics when purchasing exchange-traded funds (ETFs) is assets under management. Trading volume, costs, and monitoring records are valuable data points to investigate. Investors avoid buying sparsely traded ETFs, which explains the high holdings and trading volume.  There is the possibility for more severe price movements when there are fewer investors (implying lower volume) (or what is called the "spread"). ETFs can trade at a markup or a discount, just like closed-end mutual funds. The greater the assets and trading volume, the narrower the spread.  Finally, ETFs with a solid track record are usually preferable to those with a poor track record. The ETF's tracking record indicates how closely it has followed the benchmark. The better the fund performs, the closer it gets to the bar.  Returning to the initial premise, ETFs with the most assets under management have more trading volume, lower expenses, and better monitoring. As a result, the most significant feature of the best ETFs to look for is assets under management.  An ETF's AUM is calculated by multiplying the shares outstanding by the current market price per share. The value of an ETF's assets will fluctuate due to changes in the underlying securities' weight and the formation of new shares or redemption of current shares.   It's worth mentioning that the market capitalization of an ETF and the net asset value (NAV) of its underlying securities may differ. The discrepancy results in a discount or a premium in the ETF's trading price.  Top 3 ETFs with the highest AUM Sr NoSymbolNameAUMAverage Daily Share Volume (3 Months)1SPYSPDR S&P 500 ETF Trust$386,633,000.00112,509,6802IVViShares Core S&P 500 ETF$310,256,000.008,616,1863VTIVanguard Total Stock Market ETF$273,050,000.005,093,524 1. SPDR S&P 500 ETF Trust Essentials IssuerState StreetBrandSPDRStructureUITExpense ratio0.09%InceptionJan 22, 1993Index TrackedS&P 500 IndexSegmentEquity US Large CapWeighting SchemeMarket Cap 2. iShares Core S&P 500 ETF Essentials IssuerBlackrock Financial ManagementBrandiSharesStructureETFExpense ratio0.03%InceptionMay 15, 2000Index TrackedS&P 500 IndexSegmentEquity US Large CapWeighting SchemeMarket Cap 3. Vanguard Total Stock Market ETF Essentials IssuerVanguardBrandVanguardStructureETFExpense ratio0.03%InceptionMay 24, 2001SegmentEquity US Total MarketWeighting SchemeMarket Cap FAQs How can I save for my child’s higher education? It is extremely important for parents to realize that their saving needs to beat inflation for them to afford the future cost of education. They should choose an asset class that provides them with inflation-beating returns. In most cases, mutual funds offer better returns than other investment vehicles, which can help parents save for their child’s education.  What ETF has the lowest fees?   JP Morgan Betabuilders US Equity ETF   Vanguard total stock market ETF   iShares Core S&P 500 ETF  What is an expense ratio? The fee that mutual-fund or exchange-traded fund charge investors are Expense ratio. This charge covers the costs of management, asset allocation, marketing, and other services.    These charges are calculated as a portion of an investor’s annual cost. ETF expense rates are often less than 1%. That means you spend less than $1 per year on expenses for every $100 you invest.   How much should I invest in my child’s education? Saving money without a target is challenging. As soon as your child decides what they want to pursue, look out for colleges or universities that offer the course and do your research to find out the tuition fees and accommodation costs to get an idea of the total cost of education and then explore saving plans that can help you accumulate the amount you need for college.   What were the top 3 ETFs in 2022? SPDR S&P 500 ETF Trust   iShares Core S&P 500 ETF   Vanguard Total Stock Market ETF What is an ETF?   An exchange-traded fund is an investment vehicle similar to a mutual fund. ETFs are traded on stock exchanges. ETF tracks a commodity, index, bond, or basket of assets like an index fund.   Should I put all my savings into an ETF? It is extremely dangerous to put all your savings into one asset class. As the popular saying goes, ‘Don’t put all your eggs in one basket,’ investors should look to diversify their portfolios.  Is ETF better than a mutual fund?   ETFs and mutual funds are two different investment vehicles for investors. ETFs are both actively and passively managed, but most are passively managed. Most mutual funds are actively managed by fund managers. An investor needs to understand what an investment vehicle offers and how it can help them reach their goal. There’s no right answer to this question, as it differs based on an individual’s financial goals.    

Earlier, we read about the top 3 ETFs in the small-cap category and the top 3 in the mid-cap category. Here, we will have a look at the top three ETFs in the micro-cap category.  Before finding out what the top 3 ETFs in the micro-cap category are, we must first understand what micro-cap is. What is a micro-cap?  A micro-cap is a publicly listed corporation in the United States with a market capitalization of less than $300 million.   Micro-cap firms have a more significant market cap than nano-cap businesses, but they have a lower market capitalization than any other type of company. For firms with larger market capitalizations, stock prices are not always higher than those with lower market capitalizations.   Nano and micro-cap corporations are notorious for their fluctuation, and as a result, they are viewed as risky than companies with more significant market capitalization.   Micro-caps are also high-risk because many of them have unproven goods and no firm history, resources, sales, or operations.   They are also susceptible to higher price shocks due to a lack of liquidity and a minuscule shareholder base.  As micro-cap equities have a market capitalization of $50 million to $300 million, investors can expect higher volatility and risk than equities in the S&P 500.   On the other hand, micro-caps tend to do better than their larger counterparts in periods of bullish strength.  The top 3 recommendations in the micro-cap category ETFs  Rank ETF 1 SPDR S&P 600 Small Cap Value ETF2 iShares S&P Small-Cap 600 Value ETF3 WisdomTree U.S. SmallCap Dividend Fund 1. SPDR S&P 600 Small Cap Value ETF  SLYV is a small-cap value fund that follows the S&P SmallCap 600 Value Index. It has a lesser tilt than its index and provides good small-cap value exposure.   Its constituents are selected from the S&P SmallCap 600 companies with the best value characteristics, as measured by the following ratios  book value-to-price ratio   earnings-to-price ratio  sales-to-price ratio  The fundamental benchmark’s weight is the respective market capitalization and is rebalanced once a year. The fund uses a sampling technique, which implies this might not possess all of the underlying assets in the same proportions, but it does hold exposure with a similar investment profile.   The MSCI ESG Fund Rating for the SPDR S&P 600 Small Cap Value ETF is BBB, reflecting a score of 5.16 out of 10.  Performance  Performance [as of 16/03/22]1 year3 years5 years10 yearsSLYV-4.94%12.16%10.27%10.95%S&P Small Cap 600 Value-0.98%13.00%9.91%11.96% The fund invests entirely in the United States.  SLYV Top 10 holdings  Source: etf.com SLYV details  BrandSPDRExpense Ratio0.15%YTD Return-3.84%AUM$4.12BNumber of Holdings459Avg. Spread ($)$0.09Average Daily $ Volume$19.87M 2. iShares S&P Small-Cap 600 Value ETF   IJS invests in potentially undervalued small-cap firms in the United States.   The S&P SmallCap 600 Underlying Index identifies value stocks with the most vital fundamental qualities, Price book value, and price to earnings ratio, and sales-to-price ratio, from the S&P SmallCap 600.   Once a year, in December, the underlying index is rebalanced. The MSCI ESG Fund Rating for the iShares S&P Small-Cap 600 Value ETF is BBB, based on 5.16 out of 10.  Performance  Performance [as of 16/03/22]1 year3 years5 years10 yearsIJS-5.09%12.01%9.30%11.51%S&P Small Cap 600 Value-0.98%13.00%9.91%11.96% The fund invests entirely in the United States.  IJS Top 10 holdings  Source: etf.com IJS details  BrandiSharesExpense Ratio0.18%YTD Return-4.02%AUM$8.71BNumber of Holdings458Avg. Spread ($)$0.07Average Daily $ Volume$51.83M 3. WisdomTree U.S. SmallCap Dividend Fund  As it is a yield-focused fund, DES stands out among the slew of US small-cap ETFs. By overweighting dividend-heavy industries, DES' strategy provides a greater dividend yield than the market. DES favors the micro-cap end of the small-cap spectrum.   After the 300 largest corporations are excluded, the residual market capitalization of the WisdomTree US Dividend Index the dividend-paying world of businesses in the US stock market is used to determine index components.   Companies that make up the lowest 25% of the residual market capitalization are taken into account. Every year, the Underlying Benchmark is rebalanced.   The fund's index was previously known as the WisdomTree Small Cap Dividend Index until June 30, 2017.  Performance  Performance [as of 16/03/22]1 year3 years5 years10 yearsDES-0.46%7.38%6.27%9.97%WisdomTree U.S. Small Cap Dividend Index2.77%8.39%6.96%10.41% The fund invests entirely in the United States. DES top 10 holdings  Source: etf.com DES details  BrandWisdomTreeExpense Ratio0.38%YTD Return-4.05%AUM$1.85BNumber of Holdings677Avg. Spread ($)$0.03Average Daily $ Volume$5.45M One should look at these ETFs before investing in the micro-cap category in the USA.  FAQs What is a micro-cap?  A micro-cap is a publicly listed corporation in the United States with a market capitalization of less than $300 million.  Micro-cap firms have a more significant market cap than nano-cap businesses, but they have a lower market capitalization than any other type of company. For firms with larger market capitalizations, stock prices are not always higher than those with lower market capitalizations. What are the 3 best ETFs for micro-cap category investing? SPDR S&P 600 Small Cap Value ETF iShares S&P Small-Cap 600 Value ETF WisdomTree U.S. SmallCap Dividend Fund Is Micro-cap investing risky? Micro-caps are also high-risk because many of them have unproven goods and no firm history, resources, sales, or operations.   Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Before finding the top three ETFs in the small-cap category, we must understand what the small cap is. What is the small cap?  A small cap is a publicly-traded firm with a market valuation of $300 million to $2 billion. The exact figures differ. The most numerous corporations in the market are small-cap stocks. Small-cap stocks outnumber large-cap and mid-cap companies combined.  Small-cap stocks offer different risks and benefits for shareholders than their larger competitors due to their size. Small-cap stocks can have higher-than-average volatility, which means they suffer rapid increases and losses.   If investors can tolerate the highs and lows over a lengthy period, they get proportional rewards. However, certain small-cap companies may experience extreme movements and be illiquid in the near term.  The following indices are the benchmarks for the small-cap universe in the United States. Both include companies from a wide range of industries:  The S&P SmallCap 600 Index is a measure of the performance of small-cap companies.   The Russell 2000 index tracks the performance of 600 small-cap firms, whereas the S&P SmallCap 600 Index monitors the behavior of 600 small-cap companies.   The Russell 2000 Index comprises about 2,000 of the smallest firms in the United States.  The S&P's small-cap Index has returned an average of 8.3 percent a year over the last 20 years, compared to 8% and 6.3 percent for its medium-large competitors, respectively. Top 3 ETFs in the small-cap category Rank ETF 1 SPDR Portfolio S&P 400 Mid Cap ETF 2 Schwab Fundamental US Small Co. Index ETF 3 ProShares S&P MidCap 400 Dividend Aristocrats ETF  1. SPDR Portfolio S&P 400 Mid Cap ETF  By tracking the S&P mid-cap 400 Index, SPMD provides exposure to the mid-cap portion of the US equity market. The S&P Committee selects stocks based on market capitalization, focusing on sector balance, by assessing the share of each GICS (Global Industry Classification Standard) category in the Underlying Index to its weight in the S&P Total Market Index's relevant market capitalization range.   SPMD has experienced multiple names, Index, and ticker changes throughout the years, previously trading under the name RSCO in November 2005 and in August 2016. (Ticker: SMD).   Finally, until January 24, 2020, it was also known as the SPDR Portfolio Mid Cap ETF, which tracked the S&P 1000 Index. The fund uses a sampling approach, and the Index-rebalancing happens every three months.   The MSCI ESG Fund Rating for the SPDR Portfolio S&P 400 Mid Cap ETF is A, with 6.51 out of ten. The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables. Performance Performance [as of 14/03/22]1 year3 years5 years10 yearsSPMD-2.50%11.90%10.17%11.20%S&P Mid Cap 400-2.49%11.95%10.10%11.26% The fund invests completely in the US market. SPMD Top 10 Holdings  Source: etf.com SPMD details  BrandSPDRExpense Ratio0.05%YTD Return-10.13%AUM$5.05BNumber of Holdings400Avg. Spread ($)$0.01Average Daily $ Volume$70.82M 2. Schwab Fundamental US Small Co. Index ETF  Small caps are approached differently by FNDA. FNDA picks and weights stocks depending on 5-year means of maintained operations cash flow, adapted sales, dividends plus buybacks, rather than a standard cap-weighted method.   It determines the bottom 12.5 percent of the qualifying list as a 'small-cap' index. The Index's constituents' weights are decided annually and partially reconstituted quarterly.   The Index is segregated into four segments, each overhauled on a rolling quarterly basis. Despite its non-traditional technique, the fund tracks its cap-weighted benchmark rather well, eliminating primary sector and size distortions.   The MSCI ESG Fund Rating for the Schwab Fundamental U.S. Small Company Index ETF is BBB, based on 5.45 out of 10. The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables.  Performance  Performance [as of 14/03/22]1 year3 years5 years10 yearsSPMD-2.69%12.25%9.93%-MSCI USA Small Cap Index-10.15%11.19%10.53%- The fund invests entirely in the US market  FNDA Top 10 Holdings  Source: etf.com FNDA details  BrandSchwabExpense Ratio0.25%YTD Return-8.09%AUM$4.75BNumber of Holdings902Avg. Spread ($)$0.05Average Daily $ Volume$15.71M 3. ProShares S&P Midcap 400 Dividend Aristocrats ETFs  REGL operates in a competitive market, but it stands out from its mid-cap competition in various ways. To begin with, it's a dividend-focused fund that only invests in firms that have raised their dividends for at least 15 years.   The strict constraints of REGL limit it to a few dozen stocks, resulting in a concentrated portfolio. It targets a minimum of 40 companies, with dividend growth histories being shortened if the minimum count is not met, and each sector is limited to just 30% of the Index weight.   Finally, the fund is equal-weighted, which means it has a lesser tilt than most mid-cap ETFs. The indicator is reweighted quarterly and reconstituted once a year.   The MSCI ESG Fund Rating for ProShares S&P MidCap 400 Dividend Aristocrats ETF is A, with 5.95 out of 10. The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables.  Performance  Performance [as of 14/03/22]1 year3 years5 years10 yearsREGL1.96%10.33%8.66%-MSCI USA Mid Cap Index0.53%14.52%12.28%- The fund invests entirely in the US market  REGL Top 10 Holdings   Source: etf.com REGL details  BrandProSharesExpense Ratio0.41%YTD Return-4.90%AUM$1.05BNumber of Holdings49Avg. Spread ($)$0.06Average Daily $ Volume$4.41M FAQs What is small-cap? A small cap is a publicly traded firm with a market valuation of $300 million to $2 billion. The exact figures differ. The most numerous corporations in the market are small-cap stocks. Small-cap stocks outnumber large-cap and mid-cap companies combined.  What is small-cap classified? A small-cap stock is a stock whose market value is anywhere between $300 million to $2 billion. What are examples of small-cap stocks? Examples of small-cap stocks are - 1. Tesla2. Nike 3. Amazon4. Walmart 5. Apple One should look at these ETFs before investing in the small-cap category in the USA. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

In the earlier article, we talked about the top 3 ETFs in the small-cap category. This article will look into the top three ETFs in mid cap category.  Before getting into the list of the top 3 ETFs in the Mid-cap segment, let's understand what Mid-cap is. What exactly is midcap?  Mid-cap companies haven't attained large-cap status, but they have a more substantial track record than small-cap businesses.   Their shares provide a perfect balance between the risks and benefits of their smaller and larger counterparts.  The market capitalization of a mid-cap company typically runs between $2 billion and $10 billion. As the name suggests, a mid-cap corporation sits halfway among large-cap (or big-cap) and small-cap businesses.  These businesses usually have a well-established business model and a strong presence in their respective industries, and they may see significant development as their market share expands.   Large-cap businesses are eager for mergers and acquisitions. However, past large-cap corporations that have shrunk in size and dominance are present in the mid-cap category.  Mid-cap stocks are low at risk, have low volatility, and have a lesser growth trajectory than small-cap stocks, but they are riskier, exhibit more turbulence, and have higher potential gains than large-cap firms.  For mid-cap equities, there are two key benchmarks The Russell Midcap Index is a subset of the broader Russell 1000 Index - it monitors roughly twice as many companies as more than 800.  The S&P Mid-Cap 400 Index measures the performance of 400 mid-sized corporations in the United States with market capitalizations ranging from $2 billion to $8 billion.  The top 3 recommendations in the mid-cap category ETFs  Rank ETF 1 Invesco Russell 1000 Dynamic Multifactor ETF 2 JPMorgan BetaBuilders U.S. Mid Cap Equity ETF 3 iShares Morningstar Mid-Cap Growth ETF  1. Invesco Russell 1000 Dynamic Multifactor ETF  The Russell 1000 Index's component securities’ rankings are given by OMFL based on their value, size, momentum, quality, and low volatility.  Oppenheimer uses a rules-based system based on fundamental economic statistics and global risk appetite to assess the current market cycle's state: growth, downturn, contraction, or recovery.   The fund adjusts its exposure to favor the elements that perform best in the current market. The aggregate factor score, adjusted by market cap, weights holdings.   By applying this dynamic overlay, OMFL takes advantage of the cyclical nature of factor performance. For this added benefit, the fund has a low price.  The MSCI ESG Fund Rating for Invesco Russell 1000 Dynamic Multifactor ETF is AA, with 7.67 out of 10. The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables  Performance  Performance [as of 14/03/22]1 year3 years5 years10 yearsOMFL1.79%17.46%--Russell 1000 Invesco Dynamic Multifactor Index2.08%18.04%-- The fund invests entirely in the USA.  OMFL Top 10 Holdings  Source: etf.com OMFL details  BrandInvescoExpense Ratio0.29%YTD Return-12.76%AUM$1.73BNumber of Holdings171Avg. Spread ($)$0.03Average Daily $ Volume$8.28M 2. JPMorgan BetaBuilders U.S. Mid Cap Equity ETF.  BBMC is a passively managed fund that tracks an index that tracks mid-cap firms across multiple sectors in the US stock market.   Although extensive and small-cap firms may be included, the index generally analyses firms between 85th and 95th percentile rank in market capitalization of the US investible universe.   Common shares, preference shares, and REITs are examples of equity securities. BBMC, part of the 'BetaBuilders' suite, provides plain-vanilla exposure to mid-cap stocks, which can be utilized as a core investment or complement BBUS and BBSC, respectively, covering the whole market and small-cap parts of the US equity market.   The fund will invest up to 20% in the future to track the index more closely. The index’s rebalancing is done every three months. The MSCI ESG Fund Rating of A for JPMorgan BetaBuilders U.S. Mid Cap Equity ETF is 6.01 out of 10.   The MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables.  Performance  Performance [as of 14/03/22]1 month3 monthsYTDBBMC-5.53%-10.14%-13.71%MSCI USA Mid Cap Index-4.96%-9.73%-12.84% The fund invests only in the USA.  BBMC Top 10 Holdings  Source: etf.com BBMC details  BrandJPMorganExpense Ratio0.07%YTD Return-13.71%AUM$1.49BNumber of Holdings638Avg. Spread ($)$0.10Average Daily $ Volume$957.72K 3. iShares Morningstar Mid-Cap Growth ETF  IMCG is a growth-oriented, passively managed fund that invests in US midcap equities. Morningstar's index technique, which incorporates fundamental variables, is used to choose stocks.   This technique defines the selected growth companies as having above-average historical and anticipated income, revenues, equity, and operating cash growth.   The underlying index is recreated twice a year and quarterly rebalanced. Before March 19, 2021, the fund used the JKH ticker to track the Morningstar US Mid Growth Index. The MSCI ESG Fund Rating for the iShares Morningstar Mid-Cap Growth ETF is AA, with 7.27 out of ten.   MSCI ESG Fund Rating assesses a portfolio's long-term resistance to risks and opportunities posed by environmental, social, and governance variables.  Performance  Performance [as of 14/03/22]1 year3 years5 years10 yearsIMCG-6.11%15.48%15.81%13.25%MSCI USA Mid Cap Growth Index-8.62%14.87%13.46%12.67% The fund invests only in the USA.  IMCG Top 10 Holdings  Source: etf.com IMCG details  BrandiSharesExpense Ratio0.06%YTD Return-19.47%AUM$1.13BNumber of Holdings359Avg. Spread ($)$0.08Average Daily $ Volume$10.40M One should look out at these ETFs before investing in the mid-cap category in the USA. FAQs What is a mid-cap company? Mid-cap companies are those companies that have a market capitalization between $2 billion and $10 billion. What are the top 3 ETFs in mid-cap categories? Invesco Russell 1000 Dynamic Multifactor ETF JPMorgan BetaBuilders U.S. Mid Cap Equity ETF. iShares Morningstar Mid-Cap Growth ETF Are mid-cap stocks risky investments? Mid-cap stocks are low at risk, have low volatility, and have a lesser growth trajectory than small-cap stocks, but they are riskier, exhibit more turbulence, and have higher potential gains than large-cap firms.  Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

The expense ratio is one of the most vital aspects of ETF investing. However, many investors are unaware of the fact that a portion of your portfolio is allocated to a charge termed an expense ratio each year. It's critical to understand the costs you're paying no matter what you're investing in.  And, given the prevalence of mutual funds and exchange-traded funds (ETFs), many of us pay an annual expense ratio out of our portfolios. You'll learn what an expense ratio is, why it's essential, and how to spot a good one when you see one. What is an Expense ratio? An expense ratio is a fee that a mutual fund or exchange-traded fund charges investors (ETF). This charge covers the costs of management, asset allocation, marketing, and other services.   These fees calculation are done as a percentage of an investor's annual cost. ETF expense rates are usually less than 1%. That means you spend less than $10 per year on expenses for every $1,000 you invest.  "In the simplest terms, an expense ratio is a convenience fee for not having to pick and trade individual stocks yourself".  - Leighann Miko, certified financial planner (CFP) and founder of Equal Financial, explains expense ratio The expense ratio is the reward for the fund managers for supervising the fund's holdings and coordinating investment plans in actively managed funds.   Activities of the fund manager include time spent choosing and trading securities, reallocating the portfolio, processing payouts, and other procedures necessary to keep the fund up to meet its objectives.  The expense ratio encompasses license fees paid to significant stock indices for passive funds and ETFs that don't actively select investments and instead try to replicate the underlying index.  Calculation of expense ratio  Expense ratio = Total fund expenses / Total fund assets under management How do they work?  The expense ratio is expressed as a percentage of your fund investment. A fund, for example, might charge 0.30 percent. That implies for every $1,000 you put into the fund; you'll pay $3 per year.   If you own the investment for the entire year, you'll have to pay this. However, don't think you'll be able to sell your funds right before the end of the year and escape paying the fee.   The management company for an ETF will deduct the cost from the fund's net asset value daily, making it essentially undetectable to you.  What does a reasonable expense ratio look like?  According to experts, an expense ratio of < 2% is low and > 2% is considered high. The higher your expense ratio, the lower your returns will be.  As per Morningstar, the weighted mean expense ratio for ETFs in 2019 was 0.45 percent. That's less than 1/2 from what it was in 1999, and the trend is anticipated to continue. It's a matter of opinion on what defines a decent expense ratio for an ETF. Investors aren’t liable to pay hefty prices to invest in ETFs, and they should focus on ETFs with competitive and consistent expense ratios.  What else should you think when it comes to the expense ratio?  Experts advise looking for reduced-cost funds so you don't lose a lot of money in fees throughout your investment duration. It's not only the upfront costs; you're also losing the value of those assets as they compound.  Larger funds can frequently carry a lesser expense ratio because some expenditures, such as fund management, can spread over a more extensive asset base.  The smaller fund may need to charge more to break even, but as it expands, it may be able to lower its expense ratio to a comparable price.  Mutual funds may levy a sales load, which can be pretty high (up to a few percent) but is taken into account for the expense ratio. That's a different type of cost, and you must do everything you can to avoid funds that charge them. Major brokers provide many mutual funds with no sales load and low expense ratios. FAQs What is a good ETF expense ratio? According to experts, an expense ratio of < 2% is low, and > 2% is considered high. The higher your expense ratio, the lower your returns will be. Are ETFs expense ratios high? According to experts, an expense ratio of < 2% is low, and > 2% is considered high. The higher your expense ratio, the lower your returns will be. It’s a matter of opinion on what defines a decent expense ratio for an ETF. Investors aren’t liable to pay hefty prices to invest in ETFs, and they should focus on ETFs with competitive and consistent expense ratios. Is the expense ratio charged every day? If you own the investment for the entire year, you’ll have to pay this. However, don’t think you’ll be able to sell your funds right before the end of the year and escape paying the fee. The management company for an ETF will deduct the cost from the fund’s net asset value daily, making it essentially undetectable to you. Is expense ratio important in ETF? An expense ratio is a fee that a mutual fund or exchange-traded fund charges investors (ETF). This charge covers the costs of management, asset allocation, marketing, and other services. These fees calculation are done as a percentage of an investor’s annual cost. ETF expense rates are usually less than 1%. That means you spend less than $10 per year on expenses for every $1,000 you invest.  TALK TO AN EXPERT

A stock exchange is used to sell and buy ETF shares. When you purchase or sell ETF shares, you are dealing with another investor rather than the Fund Provider (e.g., Blackrock, ProShares) via a stock market.  A stock exchange is a platform where several investors can buy and sell shares simultaneously for a set price. Orders are instructions to buy or sell stocks.   It is the responsibility of the exchange to organize all these bids because each investor receives the best possible price that meets their requirements.  When trading ETFs, an investor can employ a variety of orders To purchase and sell ETFs, some investors use market orders. A market order instructs you to instantly buy or sell ETF shares at the prevailing market price.   A market order does not describe the price you wish to trade; instead, it specifies the number of shares you would like to swap. These orders are straightforward to comprehend and carry out. "You want to buy 25 units of the Vanguard Total Stock Market (VTI) at the best accessible price," a market order says. Source: pexels Market orders should not be made because? 1. You have no control over the pricing The price displayed on your broker's website is not always the price upon which the transaction is completed. The purchase can be made at a more excellent or lower price than what you planned.  2. The broker may request more outstanding account balances than required If you wish to buy ten shares at market price, you see a cost of $100, and you have $1000 in your account, your broker may want more significant balances in your account than you need.   Even if your cash amount appears to be sufficient to fulfill a market order for ten shares, your broker may need a more extraordinary account because it does not know when your market order will be fulfilled.  Limit orders do not have these flaws. They give you price control and, as a result, don't force you to keep a more significant amount in your account than is required.  A limit order instructs you to purchase or sell a precise amount of ETF units at a specific price. Only if someone else is willing to transact with you at that price will the limit order be honored.   A limit order is similar to saying, "You want to buy 25 shares of the Vanguard Total Stock Market (VTI) ETF and am ready to pay up to $50 per share" or "You want to sell 25 shares of the Vanguard Total Stock Market (VTI) ETF, and the lowest you will go is $50 per share."  The bid and ask are terms used to describe the price at which market players are willing to swap ETFs. The highest price at which an ETF share can be purchased is the bid.  The lowest price at which an ETF share can be sold is the ask. You can also glance through the order book to get a complete list of current buy/sell orders.  The likelihood of your limited order being executed and the time required for it differ based on your specific price. You can generate orders with prices identical to or better than the bid and ask if you want to fill your limit orders quickly.   A purchase limit order with a price a cent higher than the bid or a sell limit order with a price a penny lower than the ask is what we mean by slightly better.  Just because ETFs can be traded the same way as regular stocks don't imply, they should. Investors should understand the distinction between a market order and a limit order and why one trading approach may make more sense in some situations but not in other contexts. Viewpoints may sometimes turn prospective losses into gains. FAQs What is a limit order for ETFs? A limit order is a range you set when you are about to buy or sell a stock or ETF. It can be easy to make a decision when the stock or ETF is in between the range.   Why use limit order for ETFs?    The bid and ask are terms used to describe the price at which market players are willing to swap ETFs. The highest price at which an ETF share can be purchased is the bid. The lowest price at which an ETF share can be sold is the ask. You can also glance through the order book to get a complete list of current buy/sell orders.    The likelihood of your limited order being executed and the time required for it differ based on your specific price. You can generate orders with prices identical to or better than the bid and ask if you want to fill your limit orders quickly.    How do you set a price limit on an ETF? If you wish to buy ten shares at market price, you see a cost of $100, and you have $1000 in your account, your broker may want more significant balances in your account than you need.    Even if your cash amount appears to be sufficient to fulfill a market order for ten shares, your broker may need a more extraordinary account because it does not know when your market order will be fulfilled. Limit orders do not have these flaws. They give you price control and, as a result, don’t force you to keep a more significant amount in your account than is required. A limit order instructs you to purchase or sell a precise amount of ETF units at a specific price. Only if someone else is willing to transact with you at that price will the limit order be honored.   What is the risk of a limit order? The risk of the limit order is that the investors can never execute their order if the stock or ETF doesn’t fall under the range. There is also the possibility of a lack of liquidity in the stock to fill the order when the stock reaches the range.   

When an ETF's Volatility is taken into account, an investor may find it challenging to determine which fund offers the best risk-reward ratio. Learn about the four most popular volatility metrics and how they're used in different types of risk assessments here. What is Volatility ETF? Volatility is a parameter of how quickly the price of a security fluctuates over time. It expresses the degree of risk linked with a security's price movements.   Investors and traders measure a security's Volatility to assess past price fluctuations and forecast future moves. Types of Volatility 1. Historical Volatility The historical volatility indicator shows how the price of the security has fluctuated. It helps to forecast future price fluctuations based on historical trends.  However, it does not provide insight into the future direction or trajectory of the security's price.  2. Implied Volatility This is the underlying asset's Volatility that will yield the theoretical value of an option equivalent (derivatives) to the option's current market price.  In option pricing, Implied Volatility is a critical factor. It offers a forward-looking perspective on potential price variations in the future.  Most popular volatility metrics Standard Deviation The standard deviation measures an ETF's Volatility or the likelihood for earnings to rise or fall dramatically over a short period. A volatile investment is one that poses a more significant risk since its performance can swing either way dramatically The standard deviation of an Exchange Traded Fund assesses this risk by determining how much the fund varies from its mean return. For example, a fund with a steady four-year return of 7% will have a mean, or average, of 7%. Since the ETF's return in any given year does not depart from its four-year mean of 7%, the standard deviation for such an ETF would be zero.   An ETF that returned -15%, 17%, 12%, and 20% in each of the previous four years, on the other hand, would have an average return of 8.5 percent.  This fund would also have a significant standard deviation because the fund's return departs from the mean return each year.  As a result, this fund is riskier because it swings back and forth between favorable and unfavorable returns in a short period. Beta While standard deviation measures a fund's Volatility based on the spread of its returns over time, beta, another relevant statistical measure, compares a fund's Volatility (or risk) to its index or benchmark.   When a fund's beta is very near to one, it suggests that its behavior closely resembles the underlying index or benchmark. A more extensive beta implies that the market is more volatile than the benchmark, whereas a beta below suggests that the fund is less volatile than the underlying benchmark Let's take a small example about the market; the lower the beta, the less susceptible the underlying instrument is. The QQQE has a beta of 1.04, according to ETF.com, which suggests that if the Nasdaq 100 rises by 1%, the ETF will climb by 1.04 percent. Investors who anticipate a bullish market may buy funds with high betas, increasing their chances of outperforming the market. If investors expect negative demand shortly, funds with a beta of less than one are a suitable pick because they might lose less than the benchmark.  R-squared The R-squared of a fund tells investors whether an ETF's beta is adequate compared to a benchmark.  R-squared explains the degree of association between a fund's fluctuation and market risk, or, more particularly, the extent to which a fund's variability results from the general market's day-to-day variations by calculating the relationship of a fund's movements to those of an index. R-squared values vary from 0 to 100, with 0 denoting no correlation and 100 representing complete correlation. If the R-squared value of a fund's beta is near 100, the fund's beta should be trusted.  An R-squared score near zero, on the other hand, shows that the beta isn't very relevant since the ETF is being evaluated to an inadequate benchmark. More than that, the beta will be skewed by an incorrect benchmark. Because alpha is determined using the beta, it's best not to trust the number provided for alpha if the fund's R-squared value is low. Alpha The amount of additional risk that enabled the ETF to outperform its matching benchmark is measured by alpha.  Using beta, alpha evaluates the fund's return to the risk-adjusted returns of the benchmark and determines whether the fund outperforms the market, being consistent in terms of risk. For instance, if a fund's alpha is one, it exceeds the benchmark by one percent. Negative alphas are wrong since they suggest that the ETF underperformed for the fund's investors' additional, fund-specific risk. These are some factors that should help you evaluate the risk associated with ETFs. However, one must also consider their risk appetite before investing. FAQs How do you calculate the volatility of an ETF? The standard deviation measures an ETF’s Volatility or the likelihood for earnings to rise or fall dramatically over a short period. A volatile investment is one that poses a more significant risk since its performance can swing either way dramatically. The standard deviation of an exchange-traded fund assesses this risk by determining how much the fund varies from its mean return. What is a good volatility ETF? The standard deviation of an exchange-traded fund assesses this risk by determining how much the fund varies from its mean return. For example, a fund with a steady four-year return of 7% will have a mean, or average, of 7%. Since the ETF’s return in any given year does not depart from its four-year mean of 7%, the standard deviation for such an ETF would be zero. An ETF that returned –15%, 17%, 12%, and 20% in each of the previous four years, on the other hand, would have an average return of 8.5 percent. This fund would also have a significant standard deviation because the fund’s return departs from the mean return each year. As a result, this fund is riskier because it swings back and forth between favorable and unfavorable returns in a short period. What is a good volatility percentage? The standard deviation of an exchange-traded fund assesses this risk by determining how much the fund varies from its mean return. For example, a fund with a steady four-year return of 7% will have a mean, or average, of 7%. Since the ETF’s return in any given year does not depart from its four-year mean of 7%, the standard deviation for such an ETF would be zero. An ETF that returned –15%, 17%, 12%, and 20% in each of the previous four years, on the other hand, would have an average return of 8.5 percent. This fund would also have a significant standard deviation because the fund’s return departs from the mean return each year. How does a volatility ETF work? A volatility ETF will move in the opposite direction to the popular stock market indices. When the stock market index moves up, the volatility ETF will decline. Consult an expert advisor to get the right plan for you TALK TO AN EXPERT

Excited to get into the world of investing? Exchange-traded funds or ETFs might be your best bet. It offers a chance for those new to investing to gain exposure to the markets of their choice, without needing to invest exorbitant amounts of money. With ETFs, even a complete newbie can begin buying and selling investment products that could allow you to profit significantly in the long term. It is also a great way to quickly succeed at fundraising for education. You could put your money into several different asset classes like stocks, bonds, commodities, precious metals, and more. For some, SIPs and Mutual Funds may be a better choice, so we recommend reading more about them as well, before pulling the trigger and making a decision. With that said, investing carries inherent risks, so only invest what you are prepared to lose. It isn’t a good idea to bet the farm on a single ETF product that could move against you. However, in the long-term, stock indices like the S&P500, DJI, NIFTY50, and more have been known to trend upwards and be relatively safe bets to invest in. With that said, it is essential to understand exactly what an ETF is before we can delve into who they are perfect for and what their shortcomings are. Exchange-traded Funds (ETFs) - What are they & how can you profit from them? As the name suggests, exchange-traded funds, unlike Mutual Funds, are traded on stock exchanges around the world. Thousands of these ETFs are traded on a day-to-day basis by both professional traders and High-Frequency Trading bots, also known as HFTs. Photo by Anna Nekrashevich from Pexels Does all this sound a little too technical? No need to worry, because we are about to break it down for you and introduce you to the basics, along with the most important aspects that you need to know. First, we are going to dive deep into who might find ETFs a suitable option for investment. Who should invest in ETFs? While anybody above the legal age in their country could invest in an ETF, there are specific types of people that can derive great value from them - 1. Students and beginner investors For those who are completely new to this space, ETFs can be an excellent way to get started and get a feel for investing your money in different asset classes. ETFs form one of the best child investment options available today. As a student who has prior commitments and other occupations, ETFs are a powerful tool to make sure that you get a feel for investing early on. Since they require you to do very little once you have purchased them, you are much more likely to be able to track them and gain valuable experience with minimum effort. 2. Those with full-time commitments In today’s fast-paced world, not everyone has the precious resource of time to go through all of the nuances of investing. Especially for those who work a full-time job, and even potentially two jobs at the same time, it can be overwhelming and even impossible to find the time to delve deep into the financial markets and how to profit from them. In this way, ETFs are a great way for busy professionals and even fully engaged stay-at-home moms to invest their money without investing much of their time. 3. Investors looking to limit their risk in the market If you have the time to keep track of your investments but simply do not want to overexpose yourself to excessive risk, ETFs are a great way to go about investing. Mini and micro ETFs allow you to invest small amounts of money that suit your risk appetite, meaning that you only ever need to invest as much as you would feel comfortable with. This is one of the main reasons that ETFs are so popular worldwide. Are there any downsides to investing in an ETF? Investing in ETFs can be a dream come true if you’re looking to expose yourself to minimize expenses. However, as with anything in life, there are pros and cons to investing in an ETF. It helps to be aware of these downsides especially as a beginner to ETFs so that you can keep yourself better informed and avoid any surprises. Some of the downsides to investing in an ETF are - 1. Transaction costs As the saying goes, nothing in life is free. This could not be more true when it comes to purchasing and holding an ETF. Depending on which exchange you choose to invest your money with, you could be subject to a whole host of fees, including - Order book fees Purchase/sale fees Time-based holding fees Over time, these fees can build up to be a significant amount of money, meaning that you will need to take this into account when calculating your final profit or loss. Fees can eat into your profits drastically, so it is essential to choose a broker or exchange that offers you the best deal when it comes to the added costs of buying and selling ETFs. 2. Tracking errors At times, ETFs can stray far away from the actual price of the index that they track. This can be for a variety of reasons, including supply and demand fluctuations, liquidity difficulties, and other such factors. In such cases, you may find that the particular ETF you have invested in trades at a different price to the particular stock, commodity, index, or precious metal that it tracks. While this is normal and generally accepted in the world of investing, it is a downside to be particularly aware of as you embark on your trading journey with ETFs. 3. Management Fees Since ETFs are products created by exchanges and financial institutions, they often attract management fees that you are likely to be liable to pay when you purchase them. These management fees contribute towards the maintenance of the exchange rate and order book liquidity and also incentivize the broker to provide such products for trading. Keep in mind though, that management fees are in general just a small percentage of the entire amount that you will spend on your purchase. However, it makes sense to shop around for exchanges that offer reduced management rates, special offers, and bonuses that can help you lessen the amount you need to pay. FAQs What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment is reduced significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world. Are ETFs good for beginners? ETFs are generally suitable for beginners as they are inexpensive compared to a few other investment tools. ETFs have a diversified asset profile, reducing the risk associated with the investment significantly. Conclusion Exchange-traded funds are perfect for those looking to invest in the stock market for the first time. It also helps those who have limited knowledge of the stock market and the various intricacies that make up trading and investing. If you’re someone who is just starting or attempting to experiment with the prices of various stocks, commodities, or precious metals, ETFs are a great way to start. Just remember, however, to always do your due diligence and research the products you are interested in, and the associated risks and costs that come with them.

Barclays made a substantial strategic attempt to build the ETF industry in 2000, launching over 40 new products under the iShares brand, backed by intensive education and marketing.   BlackRock bought the iShares brand and company from Barclays in 2009 and now manages a group of exchange-traded funds (ETFs). The listing of iShares funds London Stock Exchange New York Stock Exchange Hong Kong Stock Exchange iShares provides portfolio building blocks for small and large investors through the medium of ETFs. iShares offers more than 900 different investment products and has an AUM of over $ 3 trillion.  iShares provides a varied range of investment products based on strategies, assets, themes, goals, etc iShares has several ETFs and Mutual funds.   However, ETFs dominate the space. As of February 2022, iShares ETFs dominated the Market capitalization of the most significant exchange-traded funds (ETFs) worldwide. Blackrock iShares offers various investment products in ETF and mutual fund parlance. They include underlying assets of bonds, stocks, real estate, commodities, etc., in developed and emerging economies.   One of the unique traits of iShares is that it is a leading player in offering sustainable ETFs. iShares has been providing ESG-based ETFs for its investors. ESG funds are funds that have underlying securities of firms and countries which have passed rigorous  Requirements of being ESG compliant. Only assets with a high sustainability score are included; this would rule out sovereign bonds with unsound ESG track records.   An ESG in security selection leads to better-informed investment decisions, and sustainability funds may outperform non-sustainable funds due to superior risk management.   Companies having a lesser carbon footprint incur less regulatory scrutiny than others, thus making their stock stable over time.   Sustainable funds include ETFs classified as Screened ETFs mimic specific indices that eliminate the risk of exposure to certain areas of business. iShares ESG Screened S&P 500 ETF is an example of a screened ETF.   A broad ESG ETF is a group of ETFs that track ESG-compliant sectors, businesses, and indices. It has several subcategories.  Broad ESG ETFs screen sectors and indices based on their ESG compliance- having several subtypes, namely. Thematic ESG ETFs focus on one of the ESG themes of Environment, Social, or Governance. One such fund classification in thematic ESG is Carbon transition readiness.   These funds focus on companies and sectors that Blackrock feels are ready to work in a low carbon footprint economy. Impact funds generate sustainable outcomes alongside a financial return.  iShares also provides investors with a technologically superior core portfolio builder, which helps investors build their long-term wealth growth portfolio.   It also provides investors with ETFs based on various goals of wealth creation, income earning, active factor-based wealth creation, etc.  Income ETFs provide investors with two choices of ETFs One for yield Fixed income. Yield ETFs include ETFs in the likes of Equity Income ETFs, High Yield Bond ETFs, International Bond ETFs, Tax-Free Muni ETFs, Hybrid Security ETFs, Real Estate ETFs, and multi–Asset ETFs.   Fixed-income ETFs include ETFs like Core Bond ETFs, Investment Grade ETFs, Short Duration Bond ETFs, Tax-Free Muni ETFs, International Bond ETFs, Inflation-Protected ETFs, Interest Rate-Hedged ETFs, etc.  Along with ETFs, iShares also has a comprehensive collection of mutual funds that invest in asset classes like equities, bonds, real estate, etc. iShares mutual funds started as early as 1993, with the iShares S&P 500 index fund.   Some iShares Mutual Funds are Russell 1000 Large-Cap Index Fund iShares Developed Real Estate, Index Fund Short-Term TIPS Bond Index Fund iShares U.S. Aggregate Bond Index Fund, etc.   The bottom line is that whilst building a portfolio, neglecting iShares should not be the case.  FAQs What is an ETF? An ETF stands for exchange-traded fund (ETF). One single ETF is a basket of securities that can be bought and sold like mutual funds through a brokerage firm. ETFs track a specific index such as S&P, sector, commodity, or other assets. Much like stocks, ETFs can be traded on the market. Is an ETF better than a stock? Investing in an ETF is less risky than investing in a stock, as ETFs are diversified. In the case of ETFs, investors do not control what happens to the portions of the ETFs. ETFs have a diversified profile of assets, and the risk associated with the investment is reduced significantly. In stocks, the risk attached is higher as the stock price depends entirely upon the company’s performance and other exogenous factors of the world.    Does BlackRock run iShares? Blackrock is responsible for iShares ETFs and it is the largest asset manager in the world. Consult an expert advisor to get the right plan TALK TO AN EXPERT