in view of the popularity of exchange-traded funds, it is very important to track these funds into the market. So what kinds of ETFs are there?

1. American market index ETF

Market ETF usually tracks major market indexes and is the most active ETF in the exchange. But some market ETFs also track low-volume indexes. Remember, the goal of market ETF is to simulate the basic index _ not to outperform it.

example: QQQQ tracking Nasdaq 1 index.

2. Foreign market index ETF

The United States is not the only country with market index ETF. There are many foreign ETFs to choose from. Therefore, if you seek international risks or want to hedge foreign investment risks, country or region ETFs may be a good choice.

example: Nikkei index, etc.

3. Foreign currency ETFs

Foreign currency ETFs help investors gain foreign exchange exposure without completing complex transactions. Currency ETF seems to be a simple investment tool to track foreign currency, similar to the way market ETF tracks its basic index. In some cases, this type of ETF tracks a basket of currencies, enabling investors to obtain multiple foreign currencies.

4. Industry and industry ETFs

Industry ETFs usually track the industry index representing a certain industry. These tools can help investors get investment in certain market areas, such as pharmaceuticals, without buying shares of multiple companies.

5. Commodity ETFs

Commodity ETFs are similar to industry ETFs because they target certain areas of the market. However, when you buy a commodity ETF (such as gold or energy), you don't actually buy a commodity. Instead, these ETFs consist of derivative contracts to imitate the prices of related commodities. In short: when you buy an oil ETF, you are investing in oil without setting up a mining rig in your backyard!

6. Derivative ETFs

Some ETFs do not contain stocks at all. Example: Commodity ETF consists of derivative contracts, such as futures, forwards and options. Although the goal is to imitate investment products, there are different ways to achieve this goal in the construction of ETF.

7. Style ETFs

Some ETFs track a certain investment style or market value. Style ETF is the most active trading in the United States, and exists in the growth and value index developed by S&P/Barra and Russell. If you have specific investment goals based on market value style, you can achieve your goals through style ETFs, such as SPDR Dow Jones Large Stock Value ETF(ELV), which tracks the Dow Jones American Large Stock Value Index.

8. Bond ETFs

Many available bond ETFs cover a wide range, from international to government to enterprises, just to name a few. Bond ETFs have a difficult task in construction because they track illiquid investment products. Bonds are not active in the secondary market because they are usually held until maturity. However, ETF is an actively traded product on the floor of the exchange. ETF providers, such as Barclays Bank, have launched debt-based ETFs and created successful bond funds, such as SPDR Capital Credit Bond ETF (LWC). This issue provides investors with opportunities in the bond market while still maintaining the advantages of ETF.

9. ETNs_ Exchange-traded notes

Exchange-traded notes (ETN) are issued by a large bank as senior bonds. This is different from ETF, which includes securities or derivative contracts. When you buy ETN, you will receive debt investment similar to bonds. ETN is supported by banks with high credit rating, so it is regarded as a safe investment product. However, the bill is not completely free from credit risk.

although ETN is not a real ETF technically, people still classify them into the same category.

1. Reverse ETF

When the market plummets, investors like to short positions. However, if there are restrictions on the sale of certain investments, the margin may not allow it. Enter a reverse ETF to create a short position at the time of purchase by providing a reverse reaction to the direction of the underlying index or assets.

11. Leveraged ETF

Leveraged ETF is a controversial tool, which is most suitable for advanced ETF trading strategies. A common misunderstanding of leveraged ETFs is that they generate exponential annual returns, but in fact their goal is to provide leveraged daily returns of basic indexes and assets. But even this intention is far from certain. Therefore, before adding a leveraged ETF to your portfolio, please do a thorough research.

12. Actively managed ETFs

The ongoing war with ETFs of the same fund may just be an ETF that is actively managed in a compromise. These combine the advantages of trading and exchange-traded funds into one asset, while eliminating some shortcomings.

13. Dividend ETF

Dividend ETF tracks the dividend index, which consists of various stocks that pay dividends. However, in some cases, dividend stocks are subdivided by market value or geographical location.

14. Innovative ETFs

The growing popularity of ETFs has led to a series of innovative funds, such as volatility ETFs and tax-deferred ETFs. With the continuous development of the world, different changes will be the same.