How Exchange Traded Funds Work Part I - Video Tutorial

How Exchange Traded Funds Work Part I - Gaurav Bhola from Garv Financial on Vimeo.

TUTORIAL TEXT

Welcome to Garv Financial. My name is Gaurav Bhola. The tutorial is on “How Exchange Traded Funds Work Part I.”

What is an ETF or Exchange Traded Fund

Exchange traded funds are like mutual funds that trade similarly to stocks. Like stocks, ETFs trade intraday; trading any time during the market is open. So basically you get the flexibility of trading like the stock with the underlining investment choices of index funds.

Types of ETF’s

There are hundreds of exchange traded funds that track broad market indices and trade daily. Some of the popular ETF’s are the NASDAQ 100 tracking stock QQQQ, iShares, SPDRs, Vipers, and DIAMONDs.

QQQQ
Represents the NASDAQ 100 index which has 200 of the largest and most actively traded nonfinancial stocks on the NASDAQ. QQQQ gives you wide exposure to the technology sector. This is a very opportune way to invest long-term in the technology arena. So instead of buying a single technology stock, with a QQQQ you can diversify in the entire technology sector.

SPDRs
This is one of the most popular exchange traded funds, known as spiders. The SPDRs bundle up the S&P 500 benchmark and gives you ownership in the index.

Additionally, you can also purchase separate SPDRs that reflect the various sectors of the S&P 500 stocks.

iShares
These class of ETF’s are synonymous with exchange traded funds like Xerox is to photocopy. These are offered by Barclays Global Investors. Currently there are over 120 forms iShares.

Vipers
Vipers offered by the Vanguard company just like iShares are offered by Barclays. These ETFs have been marketed to consumers and investors which have several underlining investments in various sectors.

DIAMONDs
These exchange traded funds track the Dow Jones Industrial Average.

My name is Gaurav Bhola. Thank you, for watching “How Exchange Traded Funds Work Part I.” Part II is available at GarvFinancial.com, along with additional financial tutorials.