subject: Exchange Traded Fund Sectors Positioned For the Future [print this page] Exchange Traded Fund Sectors Positioned For the Future
Exchange Traded Fund Sectors Positioned For the Future
The exchange-traded fund (ETF) has transformed from a struggling strategy in the early '80s to become a fully developed $1 trillion industry. An ETF is a collection of stocks, bonds, or investments that track an index and that can be traded on the stock exchange. Exchange-traded funds have an advantage over mutual funds because they tend to be less expensive and are traded with greater flexibility. While ETFs do offer several advantages, not all funds are guaranteed to be successful - so it is crucial to find funds that are currently well priced and show potential for increase.
There are four major investment themes that are positioned to develop and produce large profits in the relative near future. These sectors are bank ETFs, international ETFs and commodity ETFs. Banking is considered to be a promising investment - with the banks slowly returning to stable ground, there is new potential for increased competition, leading to greater rewards. Some international ETFs displayed their strong potential when Asian economies during the financial crisis demonstrated resilience and remarkable strength. And while Asia did suffer along with the United States, Asian companies retain low debt levels and display the ability to grow very quickly. Commodities are another sector investors might keep an eye on; as consumer confidence returns, the money will continue to flow. With the commodities ETF sector, gold is the final potentially profitable division, and is traditionally sought after following a financial crisis as a safeguard against any future disaster. As this trend develops, the gold market will rise as a result. These four areas of the market show incredible potential for growth, and investing in these areas of exchange-traded funds could become very profitable in the future.
Exchange-traded funds are still a relatively new form of investment, but they have a huge potential for growth and success. A smart investor would take advantage of ETFs in these four leading divisions in order to find opportunities to build their wealth. With exchange-traded funds being relatively inexpensive, these booming sectors could make for promising investments and certain ETFs within each of these sectors can lead to very successful results.
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