Subscribe to Money Morning get daily headlines subscribe now! Money Morning Private Briefing today's private briefing

ETFs Article

Article Index

What Is an ETF? Six Benefits plus Three to Buy Now

what is an ETF

What is an ETF? The short answer is that it's a security that trades like a stock, has the diversification of a fund, and is tax-friendly.

The first ETF debuted in January 1993 when the SPDR S&P 500 ETF Trust was launched. Since then, ETFs have increased in popularity. Today, there are more than 1,600 ETFs, with an ETF for nearly every sector and investment strategy.

Here's what makes ETFs so popular - plus three great ETFs to buy now...

This Small-Cap ETF Will Capture the Growth in China's Middle Class

small cap etf

The best way to invest in China is changing, and this small-cap ETF will give investors an opportunity to capitalize on this fundamental shift in the Red Dragon's economy.

In the last decade, growth came from capital spending. This benefitted the large state-owned enterprises (SOES). But the Chinese economy is changing focus.

No longer will it be the large enterprises carrying the torch in the so-called Chinese economic miracle, and that's where this small-cap ETF comes in...

Why Our ETF Trading Strategy for 2015 Includes This Top Tech Pick

ETF trading

On Sunday, CBS's "60 Minutes" examined the Sony hack from November 2014. The segment detailed just how ill-prepared most Americans and corporations are for cyberattacks.

The interviews also underscored one of our favorite ETF trading trends of 2014: cybersecurity ETFs.

"The money spent on cyber defense represents one of the highest profit potentials of anything I've encountered," Money Morning's Small-Cap Investing Specialist Sid Riggs said. "And the growth numbers spotlight not just one company but an entire sector that will have the wind at its back for the rest of our investing lifetimes."

Here's the profit potential we're seeing...

A "Digitalized" Profit Play Mr. Spock Would Love

stocks under $1

Recently, the world mourned the death of beloved actor Leonard Nimoy. Mr. Nimoy, of course, was renowned for his portrayal of the iconic character Mr. Spock on the 1966 television series "Star Trek."

One of the most memorable "Star Trek" inventions was the transporter beam that effortlessly moved people and other solid objects through space in an instant. 

Indeed, "Beam me up, Scotty" became part of the pop culture lexicon during the height of the show's popularity and remains there today.

Today's investors expecting central bankers to solve the world's economic problems might just as well believe that Janet Yellen is capable of beaming them straight into the Marriner S. Eccles Federal Reserve Board Building in Washington, D.C., which houses the main offices of the Board of Governors of the Federal Reserve System.

The world is suffering from a solvency problem - there is too much debt that can't be serviced or repaid. 

It shouldn't take a Vulcan with the cool logic and super-intelligence of Spock to understand the massive threat (and lucrative opportunity) the situation poses for the global economy and our money.

In fact, it's quite logical...

Profit from a Small Country's Fiscal "Escape" Plan

how-to-invest-in-etfs

Worldwide debt has exploded in the eight years since the beginning of the fiscal crisis from an already unsustainable level of $142 trillion to a crushing $200 trillion. The reason? To help paper over gaping holes in national economies, and because our financial system makes it too easy to just "create" money from nothing.

Now one small nation is looking at a radically different way of doing things. Although the approach is conservative, there are still some risks.

The situation provides an appealing investment opportunity, no matter the outcome, if the position is implemented correctly.

Here's how...

The Best Technology ETF to Profit from a Global $575 Billion Problem

technology etf

We alerted readers to one of tech's newest and best profit opportunities in early February. And seemingly every week, we see another screaming "buy" signal for this top investment.

The investment is a technology ETF that focuses on one of the most important and fast-growing industries today: cybersecurity.

This week's buy signal came when the White House acknowledged that Russian hackers penetrated parts of the White House's computer system in recent months.

The attack underscores the prevalence and magnitude of cybercrime in our society. And it's only the most recent example...

A Bond ETF to Play the European Hunt for Yield

bond etf

The hunt for yield in Europe is positioning a certain bond ETF for big gains.

Right now, Eurozone government bonds are a no-go. Yields are crashing all across the continent and the profit opportunities are drying up. This will only be made worse as the European Central Bank carries on with quantitative easing.

But it's making this bond ETF, which plays off an important subsector, a must.

Get in on This Europe ETF Now to Beat Surging European Markets

how much does Greece owe

Investors shouldn't let fears over the Greek debt crisis scare them away from a promising Europe ETF play.

After all, the European markets don't seem too concerned. Just look at the events that unfolded this week.

That's why this Europe ETF play is a good way to jump in on the current investor indifference over Greece and a couple of other promising trends...

Two China ETF Picks to Get You Started on China Investing Today

China ETF

Looking to start investing in China? These two China ETF picks are a god place to start.

One is a broader play that invests in China as whole. The other targets what may be the most exciting market trend that will emerge in China over the next decade.

After all, you can't go wrong with a solid China ETF in your portfolio...

What Is a Leveraged ETF?

leveraged ETF

A leveraged ETF (exchanged-traded fund) is like most ETFs in that it trades like a stock and is designed to track the performance of a particular index.

However, a leveraged ETF uses financial derivatives and debt to increase returns. It also doesn't track the returns of an index on an annual basis, but the daily changes.

Here's a closer look...

Why This Popular Crude Oil ETF Is Not the Best Way to Play the Rebound

Crude oil ETF

Oil prices are on the rise to end March. On March 26 WTI oil hit a high of $52.46. That's a 19% climb from the lows it hit just two weeks ago.

And as the price of oil rises, shares of the United States Oil Fund LP (NYSE: USO) are climbing too. The crude oil ETF is up 9% since March 18.

You see, investors are flooding into this oil ETF as a way to play rebounding oil prices.

But for long-term investors, buying shares of this crude oil ETF is not a good strategy for playing oil's rebound. And there is one big reason why...

A Major Solar ETF "Buy" Signal Is Here

solar ETF cells

The potential of solar power has been touted for years, yet it has always come with major limitations. The costs of producing solar power have outweighed the benefits for many power companies.

But that's changing. Solar power has reached a tipping point, and it's creating a massive profit opportunity for one solar ETF.

"Despite the odds, alternative energy - led by solar power - is rapidly approaching what the industry has always considered to be the "Holy Grail,'" Money Morning's Global Energy Strategist Dr. Kent Moors said.

ETF Investing Made Even Easier with These 7 Picks

ETF investing

ETF investing is popular because of its ease and safety, though you might feel overwhelmed at first. Here are seven successful ETFs to put your mind at ease...

And don't stress about what sectors to pick from, we've also highlighted the best in an array of specializations so you don't have to.

Here are seven successful ETFs to put your mind at ease...

The Best MLP ETF to Buy Right Now

crude-oil-sketch

Explosive growth in oil production has provided master limited partnership (MLP) investors a wave of new opportunities - and an MLP ETF is the best way to tap the sector's best opportunities.

The low price landscape is being reshaped by a wave of M&A activity.

Here's one MLP ETF that will benefit from the industry's changes...

One REIT ETF to Buy Today

reit etf

REITs are companies that own or finance income-producing real estate properties. And they've been tearing up the market lately.

An REIT ETF is the best way to own a basket of these soaring securities.

Here's a look at one REIT ETF growing faster than the Dow and S&P combined...