ETF investment has become more and more popular in recent years, mainly because it operates in the same way as stocks and can be bought and sold freely at the opening of the stock market. The relevant management fees are also much cheaper than traditional funds, and can meet the need to track specific targets.

At present, global ETF assets have soared to an all-time high of US $9 trillion, but ETF accounts for no more than 10% of global assets under management, and the industry expects the next decade to be a period of rapid development for ETF. Blackrock predicts that the size of global ETF assets under management will reach $15 trillion as early as 2025.

What is ETF?

ETF is a kind of exchange-traded open-index fund, which is usually called exchange-traded fund (Exchange Traded Funds, referred to as "ETF").

ETF is a mainstream investment tool in the US stock market. By the end of 2020, US ETF assets under management totaled US $5.4 trillion, accounting for 18% of the US $30 trillion asset management market. There are many kinds of ETF in US stocks: some track the US market index, some track other countries' stock markets, and some track oil, gold, foreign exchange and other different kinds of ETF.

At present, the three major issuers, Vanguard, Blackrock and State Street Global Advisors, cover more than 80 per cent of the US ETF world.

II. ETF Classification of US stocks

1. Classify by type

Active management: funds managed by fund companies are equivalent to giving money to fund managers to invest in stocks on behalf of fund managers. Katherine Wood, the "female version of Buffett" in the fire this year, managed it.$ARK Innovation ETF (ARKK.US) $Just like this, fund managers can buy and sell stocks according to their own judgment, and whether they can make money depends on the stock speculation level of fund managers.

Passive tracking type: according to the rise and fall of the "target index", you can get basically the same rate of return as the index. Most of the ETF in the United States is of this type, such as the index ETF, and the industry ETF is passive tracking.

2. Classification by standard

1. Stocks: stock ETF accounts for 72%, with many subdivisions.

2. Currency: the number is relatively small. As of the end of August 2021, there were only 17 currency ETF in the US market.

3. Bonds: it is also common. As of the end of August 2021, the US market had 471 bond-based ETF, accounting for 18%, second only to equity ETF.

4. Commodities: 4%, such as oil, gold, silver and other related ETF.

3. Classify by direction

Forward ETF: for exampleS & P 500 ETF-SPDR (SPY.US) $Is to track the rise and fall of the S & P 500 index, which is positive. In theory, the index is up 1% and the ETF is up 1%.

Reverse ETF:$Proshares shorted S & P 500 (SH.US) $This is also the rise and fall of the S & P 500, which is also tracked, but this index theoretically means that the S & P 500 is up 1%, so the ETF is down 1%, the S & P 500 is down 1%, and the ETF is up 1%, which happens to be in the opposite direction.

III. Advantages of ETF

• It is obvious that ETF can spread investment risk. If you want to track the US stock market, then buying ETF that tracks S & P, Dow and NASDAQ is the best choice. In the long run, US stocks are generally rising, and buying ETF is also a strategy for ordinary investors. After all, most of our ordinary investors do not know a lot about many companies in US stocks, and buying ETF relatively reduces a lot of risk.

• Then you can buy industry-type ETF, for example, if you are optimistic about the semiconductor industry this year, but you are not clear about the entire semiconductor industry chain, then you can buy semiconductor ETF. And there are many types of ETF in various industries.

• Many index and industry ETF are very suitable for long-term investment. Because the index constituent stocks tracked by ETF are high-quality companies that have already been screened, and will eliminate companies with poor returns according to the actual situation, and join new high-quality companies, it can always ensure that the companies in the index are relatively high-quality.

• Index ETF completely replicates the constituent stocks of the index as the fund's investment portfolio and investment return, so the fund's holdings are also very transparent.

ETF is a very powerful investment tool.The investment field basically covers all kinds of assets, such as stocks, fixed income, currencies, derivatives, commodities and so on, so it can be said that "everything can be ETF".

The US stock ETF covers almost the capital markets of important countries around the world, making it easy for you to invest globally.

Compared with securities investment funds and individual stock investments, ETF has many advantages, such as low management fees, transparent positions, regular survival of the fittest, meeting most investment strategies, risk diversification, relatively good overall liquidity and so on. Investors are advised to pay attention to and participate in ETF investment.

At present, Fortune can trade 3000+ETF listed in US stocks, A shares and Hong Kong stocks, as well as provide ETF screening function, so that investors can easily realize various investment strategies and invest globally through the Fortune platform.