Feb 05, 2012
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ETF Investing
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Exchange Traded Funds |
Exchange traded funds are like a hybrid between a mutual fund and a common stock. Like a stock, their price fluctuates based on selling and buying demand for shares. Like a fund, they can provide investors with investment diversification and convenience.
A Shipping ETF is not as diversified as a broad market fund, since the goal or mandate of the ETF is to invest in shipping companies.
Exchange traded funds are really nothing new. Decades ago you could buy and sell "closed end funds" known as CEF's back then. Today's ETFs are not substantially dissimilar from CEF's in this author's opinion. The difference is the degree to which institutional and now retail investors are investing in these fund vehicles as investment liquidity increases.
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