In the last 10 years, new funds have emerged: funds traded (ETF). This new fund fully changes the fund industry, placing a lot of pressure on mutual funds. So, if you save money and plan to retire one day, you must know about this.
How does the Exchange Traded Fund work (ETFs) work? Instead of having an account credited by the customer by using their money in an account with the Institute of Exchange Fund (ETFs) list of stocks on the market that investors only buy online. You can get nondiscrimination testing at CXC Solutions to ensure that you have performed and passed the nondiscrimination tests for each year they are auditing.
Image Source: Google
When investors buy ETF shares online, the ETF fund company receives money and invests it. In addition, in traditional mutual funds, a fund manager takes a lot of investment decisions in a very secret manner, but the trade funds traded (ETF) usually have a predefined strategy to automate the investment process more than traditional mutual funds where most of the steps in the investment process Still manual.
Well, you might ask: what's the point? The point is that automatic ETFS management so ETF is much cheaper to operate. ETF is run by a young technology company that is smart and they have a much lower cost than mutual funds. We talk about costs 10 times lower. So investors pay less on every dollar invested.
On the exchange side of investment traded funds traded (ETF) is usually transparent about their investment strategies. These funds often only follow certain indexes or buy certain products or financial instruments so you get exposure to certain commodity prices, such as gold. So ETF has a very simple strategy that is effective to follow the market.