Are There Different Types of ETFs?

Are There Different Types of ETFs?

Yes, there are different types of ETFs, each designed to cater to various investment needs and objectives. Here are some of the main types:

1.     Equity ETFs:

o   Description: Equity ETFs are index-based passive investment vehicles that invest in securities in the same proportion as the underlying index. They aim to replicate the performance of a specific stock market index.

o   Example: SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index.

2.     Debt ETFs:

o   Description: Similar to equity ETFs, debt ETFs provide exposure to a basket of securities, but in this case, they invest in bonds and other debt instruments. They offer a way to invest in fixed-income securities with the benefits of ETF trading.

o   Example: iShares Core U.S. Aggregate Bond ETF (AGG).

3.     Gold ETFs:

o   Description: Gold ETFs invest in gold bullion and are based on gold prices. These ETFs offer a transparent way to invest in gold, as their holdings are directly linked to the price of gold.

o   Example: SPDR Gold Shares (GLD), which tracks the price of gold.

4.     Global ETFs:

o   Description: Global ETFs invest primarily in foreign securities. These ETFs may track global markets or a specific country's benchmark index, providing exposure to international stocks and economies.

o   Example: iShares MSCI Emerging Markets ETF (EEM), which tracks the MSCI Emerging Markets Index.


    • Related Articles

    • How many types of orders can I place on the FnO360 window?

      On the FnO360 platform, you can place multiple types of orders to accommodate various trading strategies and preferences. Here are the types of orders available: · Regular Order: A standard order with options for limit or market orders, as well as ...

    • What are different types of order and its validity

      1. Limit Order Definition: An order to buy or sell a security at a specified price or better. Validity: The order remains pending until it is matched with a corresponding order or cancelled. Example: If you want to buy 100 shares of ABC Inc. at ₹50, ...

    • Are ETFs Closed-Ended Funds?

      No, ETFs are not closed-ended funds. ETFs are open-ended funds, meaning they can constantly take on new investors, and as they do, the fund's assets grow. They offer flexibility in trading and the ability to issue and redeem shares continuously. This ...

    • Are ETFs active or passive?

      ETFs can be either active or passive. Here's a brief explanation of each type: Passive ETFs: Objective: Aim to replicate the performance of a specific index, such as the S&P 500, NASDAQ-100, or another benchmark. Management Style: Passively managed, ...

    • Are There Tax Implications with ETFs?

      Yes, ETFs have tax implications, which vary depending on the type of ETF and the holding period. Here’s a detailed overview: Capital Gains Tax: For Equity ETFs: Short-Term Capital Gains (STCG): If you sell equity ETFs within one year of purchase, the ...