Category: ETF

Exchange Traded Funds (ETFs) are a relatively new phenomenon and are gaining popularity rapidly. This post outlines the key features of an ETF.

ETFs hold assets

ETFs are like mutual funds because they hold an underlying asset like stocks, debt, commodities future contracts etc. If you are new to the concept of an ETF, think of it as a mutual fund, and build your understanding from thereon. An example of an ETF is the SBI Gold ETF, which holds physical gold as its underlying asset.

ETFs charge you for their expenses

It takes money to run an exchange traded fund, and that money is recovered from investors. All ETFs charge you fee which is expressed as a percentage called: “Expense Ratio”. The lower the expense ratio, the cheaper the fund is. You should try to compare expense ratios between different ETFs, as that will tell you how much you have to pay in fees. All mutual funds do this too, so in this respect ETFs are like mutual funds.

Continue reading “What is an ETF?”

Image by John & Fish

This question crops up in comments from time to time, and I thought it would be a good idea to do a quick post on it.

How to buy ETFs?

ETFs can be bought just like stocks, and if you already have a stock portfolio, buying an ETF should not present any problems to you at all. You have to find the symbol of your ETF, go through your broker, place a market or limit order for it, and you are done. That’s it – it’s that simple.

Possible cause of confusion

It is my conjecture that a little confusion is caused on this topic by the following two statements (both of which are true and seen often):

• ETFs can be traded like stocks
• ETFs can act as an alternate to mutual funds.

Continue reading “How to buy ETFs?”

There has been some interest of late in Brazil ETFs, because of their winning bid for 2016 Olympics. There are just two options as far as ETFs that solely focus on Brazil go, and even if you include Latin American ETFs – the options are still very few.

Here is a list of ETFs that will give you exposure to Brazil.

iShares MSCI Brazil Index Fund (EWZ): This is a Brazil ETF by iShares that tracks an underlying index, which aims to capture 85% of the total market capitalization of the Brazilian equity market. The expense ratio of this ETF is 0.63%.

Brazil Small Cap ETF (BRF): This is a Van Eck ETF, that provides exposure to publicly traded small cap companies that are domiciled and primarily listed on an exchange in Brazil, or which derive at least 50% of its revenues from Brazil. The net expense ratio of this Brazil ETF is 0.73%.

iShares S&P Latin America 40 Index Fund (ILF): This is an ETF that will give you exposure to a host of Latin American countries, but is not restricted to Brazil alone. Brazil does however constitute the largest portion of its funds (by country) with 60.25% holdings attributed to Brazil. Mexico is second with 26.27% assets (These are figures as of June 30, 2009). The expense ratio of this ETF is 0.50%.

SPDR S&P Emerging Latin America ETF (GML): This is also a Latin America ETF that has Brazil as its largest constituent (by Country). About 67.61% of its assets are allocated to Brazil, followed by Mexico with an allocation of 19.80% as on 09/30/2009.

Proshares Ultrashort MSCI Brazil (BZQ): This ETF is different from all the above ETFs because it is a leveraged short ETF. Simply put, it goes up in value when the Brazilian market goes down, and it moves twice as much its underlying index. You can read more about what I have written about leveraged ETFs here.

Here is a link to the all ETF Lists covered here.

There are not many people who are interested in investing in Africa, but this is a place that has been generating a little interest of late as an investment destination.

There are not a lot of options as far as ETFs that focus on Africa, but, here are a few that do give you exposure to the continent.

Van Eck Africa ETF (AFK): This is an Africa ETF that invests in equities in the entire continent. I have written previously about Van Eck ETF here.

MSCI South Africa Index Fund (EZA): It is an index fund that tracks South African equities. It tracks a capitalization weighted index that aims to capture 85% of the total market capitalization. The expense ratio of the fund is 0.63%.

SPDR S&P Emerging Middle East and Africa ETF (GAF): As the name suggests, this is not an ETF that is focused entirely on Africa, but will also give you exposure to Middle East. It tracks the S&P Middle East and Africa BMI Index, which is a market capitalization weighted index that defines and measures the investable universe of publicly traded companies domiciled in emerging Middle Eastern and African markets. The gross expense ratio of this fund is 0.59%. The country with the biggest weight is South Africa with 61.6%, followed by Israel with 24.31%, Morocco 7.89% and Egypt 5.53%. (As on 6/30/09)

PowerShares MENA Frontier Countries Portfolio (PMNA): This is an ETF that is more focused on Middle East rather than Africa, but still has some African component. It tracks an index that invests in liquid stocks of companies residing in MENA frontier countries, which include Kuwait, Bahrain, Qatar, UAE, Oman, Lebanon, Egypt, Jordan and Morocco. It has 22.03% allocated to Kuwait, 20.55% to Egypt, 17.28% to Jordan, 16.21% to UAE, 11.67% to Morocco, 7.59% to Qatar and 4.66% to Oman (as on June 30, 2009)

I have compiled some ETF lists over the past few weeks, and I wanted to create a single page that points to all those ETF lists for easy reference.

With that in mind, here is a page that has all the ETF lists covered on this site.

Commodity ETFs

Gold ETF List

Silver ETF List

Oil ETF List

Gold ETFs available to Indian investors

Region ETFs

India ETF List

China ETF List

Sector Specific ETF Lists

Green ETF List

Real Estate ETF List

Bond ETFs

iShares Bond ETF List

A lot of people are looking at investing in emerging markets and few are venturing one step beyond and looking at Africa too.

At present, there aren’t many ETFs that focus on Africa, so your options are limited. Van Eck Africa ETF (AFK) is one of those limited options, and here is an overview of this Africa ETF.

This is a relatively new ETF that commenced operations only in July 2008, so it is just slightly over a year old.

The total net annual fund operating expenses of the Van Eck Africa ETF is 0.88%. It has 18.6 million dollars asset under management according to its fact sheet on 2Q 2009.

Index Underlying Van Eck Africa ETF

Continue reading “Van Eck Africa ETF”

Update: Click here to read about the latest SBI Gold Fund launched on 19 August 2011.

SBI GETS is a Gold ETF by SBI and is open to investors in India. You can invest in this ETF through a stock exchange much like any other stock.

The SBI Gold ETF invests in physical gold, and at any time -  it will have 90% – 100% of its investments in gold and gold bullion. Up to 10% of its investments can be in debt and money market instruments.

The expense ratio of this scheme is 2.5% for Plan A and 1.5% for Plan B. Plan A is for retail investors and Plan B for institutional investors. So retail investors should really think about the expenses as 2.5% of average daily net assets.

Continue reading “SBI Gold ETF”