The Money Farm Team

An inverse ETF is a type of exchange-traded fund (ETF) that profits from a drop in the value of an underlying benchmark by using various derivatives. Inverse ETFs are comparable to short positions, which entail borrowing securities and selling them in the hopes of repurchasing them at a reduced price. Why are inverse ETFs bad? […]

To magnify exposure to a specific index, a leveraged ETF could use derivatives like options contracts. It does not enhance an index’s annual returns, but rather tracks daily fluctuations. Options contracts allow an investor to trade an underlying asset without having to acquire or sell it. Any action taken under an option contract must be […]

Leveraged ETFs frequently resemble index funds, but in addition to investor equity, the fund’s capital provides a higher level of investing exposure. For every $1 of investor cash, a leveraged ETF will typically maintain a $2 or $3 exposure to the index. The fund’s purpose is for the value of the investments made with borrowed […]

A leveraged ETF is a fund that leverages the returns of an underlying index by using derivatives and debt. In most cases, the price of an ETF grows or falls in lockstep with the index it tracks. When compared to the index, a leveraged ETF is meant to increase returns by 2:1 or 3:1. Leveraged […]

Minimum volatility ETFs (sometimes known as “min vol” ETFs) are designed to reduce stock market volatility. The S&P 500 index has reached 4,400 points, and the MSCI World Index has soared above 3,100 points for the first time ever in August. Given the current strong trend in stocks, you could believe that investment risks are […]

The ETF or fund business deducts investment management fees from exchange-traded funds (ETFs) and mutual funds, and daily changes are made to the fund’s net asset value (NAV). Because the fund company processes these fees in-house, investors don’t see them on their accounts. Investors should be concerned about the total management expense ratio (MER), which […]

Before going in and buying an oil ETF, investors need be aware of a few essential aspects. The first is that oil ETFs perform poorly in terms of tracking the price of crude oil. How is it possible? Oil ETFs are mutual funds that invest in oil futures contracts. However, because oil futures contracts expire, […]

A short exchange traded fund (ETF), also known as an inverse ETF, is a type of exchange traded vehicle that seeks to outperform its benchmark. Short ETFs produce an investment that moves in the opposite direction of its benchmark by using short-selling, futures contracts, and other derivatives. If the FTSE 100 rises in value, for […]

An exchange traded fund (ETF) is a collection of securities that trade like stocks on a stock exchange. Unlike mutual funds, which only trade once a day after the market closes, ETF share prices fluctuate throughout the day as the ETF is purchased and sold. What is an ETF and how does it work? The […]

An ETF company’s typical operations include expenses such as manager wages, custodian services, and marketing charges, all of which are deducted from the NAV. Assume an ETF has a 0.75 percent stated annual cost ratio. The projected expense to be paid over the course of the year on a $50,000 investment is $375. If the […]