This paper will introduce the concept of ETF fund and list some common ETF fund indicators. ETF fund is a kind of fund that can be listed and traded on the stock exchange. Its portfolio is usually a specific market index, such as stock index, bond index or commodity index. ETF's investment flexibility and low cost make it the first choice for investors.
The concept of ETF fund ETF(ExchangeTradedFund) is an investment tool similar to traditional funds, but the difference is that ETF funds can be listed and traded on the stock exchange, and investors can buy and sell ETF funds like stocks. The investment portfolio of ETF funds is usually specific to the market index, so investors can invest in the whole market or specific industries by purchasing ETF funds.
The characteristics of ETF funds include:
Good liquidity: Since ETF funds can be listed and traded on the stock exchange, investors can buy and sell at any time and enjoy a high degree of liquidity. Low cost: Compared with traditional mutual funds, the management cost of ETF funds is lower, mainly because the investment portfolio of ETF funds is usually a passive specific index, and there is no need for active fund managers to select and operate investment targets. High transparency: ETF's portfolio is usually open and transparent, and investors can know the specific assets and weights held by the fund at any time. Common ETF fund indicators The following are some common ETF fund indicators:
net asset value
Net asset value refers to the total assets of ETF funds minus debts and other liabilities. The net asset value is usually published in the form of each fund share, and investors can calculate the value of their fund shares according to the net asset value.
market price
The market price refers to the price that investors pay or get when buying and selling ETF funds on the stock exchange. The market price usually fluctuates according to the net asset value of ETF funds and the relationship between market supply and demand.
Premium/discount rate
Premium rate/discount rate refers to the difference between the market price of ETF fund and its net asset value. If the market price of ETF funds is higher than the net asset value, then there is a premium; Conversely, if the market price is lower than the net asset value, there is a discount. The premium rate/discount rate can reflect the demand and supply of ETF funds by investors.
mistake
Error refers to the difference between ETF portfolio performance and its index. Since the portfolio of ETF funds is usually a passive index, the smaller the error, the closer the portfolio performance of ETF funds is to the index performance.
trading volume
Trading volume refers to the number of transactions of ETF funds in a certain trading day. Trading volume can reflect investors' interest and liquidity in ETF funds. The greater the transaction volume, the better the liquidity.
Dividend yield
The dividend yield refers to the ratio of the dividend amount paid to investors by ETF funds every year to the fund's net asset value. The dividend yield can reflect the income of dividends and interest in the portfolio.
Cost ratio
Expense ratio refers to the ratio of the management expense of ETF fund to the net asset value of the fund. The lower the cost ratio, the lower the management cost of ETF funds.
Conclusion ETF is a flexible and low-cost investment tool, and investors can invest in the whole market or specific industries by purchasing ETF. Common ETF fund indicators include net asset value, market price, premium rate/discount rate, error, trading volume, dividend rate and expense rate. According to these indicators, investors can evaluate and choose ETF funds that suit them.