What is ETF ( Exchange traded funds )– Exchange Traded Funds

What is ETF. What are ETFs. Who are suitable. ETF (Exchange Traded Fund) Are investment funds, which in the form of their shares (more precisely, shares) traded on the stock exchange. They got their distribution to a greater extent

Почему россияне редко инвестируют в ETF и ПИФы

What is ETF ( Exchange traded funds )– Exchange Traded Funds

ETF (Exchange Traded Funds) – foreign exchange investment funds, securities which are traded on stock exchange, or, in other words, прозрачная “упаковка”, в которой можно купить “весь рынок целиком”, T. is. invest in all securities through a brokerage account, in the corresponding index.

ETF (Exchange traded funds )(Exchange Traded Funds) is a security, which is traded, like common stocks in the world's largest markets. The constituent parts of ETF can be securities of enterprises of any region or industry., like mutual funds. Working with ETF, trader can combine the security and smooth operation of the world's major exchanges with the ability to use a huge variety of financial conditions in different countries and regions of the world.

Exchange Traded Funds - Exchange Traded Funds (ETF)

According to the legal classification, ETFs are classified as mutual funds and fall under the same rules of the US Securities Commission. (SEC), as traditional mutual funds. but, their peculiar structure ensured the difference between the SEC requirements in terms of, concerning buying and selling. ETFs differ from mutual funds in the same way, that orders for transactions with ordinary mutual funds are carried out on the market during the daytime, but the very execution of such operations, usually, produced before the close of the market. The price assigned to them is the total value of the daily closing prices of all assets., included in this mutual fund. This is not the case with ETFs.. These funds are traded all day long, and the investor has the opportunity to fix prices for the corresponding assets at any time.

Reliability of ETFs as a stock market instrument (considering separately from the reliability of any particular asset, which they can represent) should be treated in the same way, like any certificate for the securities themselves. ETF is a much more complex instrument in terms of its content., than mutual funds. In the same time, an interesting combination of participants in a specific market, presented by brokers, financial managers and market analysts makes it easy to work with them.

If you admit, that ETFs are index funds after all, then this encourages investors to delve deeper into the philosophy of investing in indices, downplaying stock picks in favor of the overall buying or selling of a given market. And unlike most traditional index funds, инвесторам не нужно занимать пассивную «купил – держишь» позицию. ETFs are increasingly becoming an attractive hedging instrument for day traders as well.. Both types of investors can coexist in the market, effectively strengthening everyone's position by reducing overall operating costs.

The number of ETFs is large and amounts to many hundreds. But not all of them are liquid.
Here is a list of the most popular ETFs..

What is ETF : in simple words - about the complex

ETFs originated as passive funds. They reflect the behavior of a particular financial index - stocks, bonds, real estate, Goods. They can correspond to the behavior of an asset., say, gold or oil, a specific sector of the economy (finance, extraction of raw materials, biotechnology, etc.), geographic area (Europe, Of America, Asia, Of Russia), company values ​​- large or small capitalization, short or long term bonds, as well as their credit rating. Let's say, one of the most famous ETFs - SPDR S&P 500 (тиккер SPY) repeats the movement of the S index&P 500.

Usually, the value of one ETF share rarely exceeds $100 - that is, ETFs are sufficiently accessible to a wide range of traders. They are successfully used in their work as institutional (pension funds, management companies) investors, as well as individuals. Even speculators use ETFs, buying or selling the whole market. This instrument has good liquidity and availability., which allows you to use it in different investment strategies, the simplest of which is asset allocation.

Most Popular ETFs ( Exchange traded funds )– Exchange Traded Funds

Fund nameTickerFund category


20-summer government bondsTLTBonds
20-summer government bonds X2 FallTBTBonds
High-risk bonds (garbage)JNKBonds
High-risk bonds (garbage)HYGBonds
Short-term government bonds (1-3 of the year)SHYBonds
Super-short-term government bonds (T-Bills)TIPBonds
Corporate bonds (different sectors with invest. rating)AGGBonds

Economy sectors

Telecommunications sectorIYZTelecommunications sector
Utilities sectorXLUUtilities sector
Insurance sectorKIEInsurance sector
Pharmaceutical companies sectorPPHPharmaceutical companies sector
Health sectorXLVHealth sector
Oil Industry Equipment Manufacturers SectorIEZOil Industry Equipment Manufacturers Sector
Water companies sectorPHOWater companies sector
Agricultural companies sectorMOOAgricultural companies sector
Semiconductor SectorSMHSemiconductor sector
Сектор полупроводников X2 – РостUSDSemiconductor sector
Сектор Энергетики 3Х – ПадениеERYEnergy sector
Raw materials sectorIYMRaw materials sector
Raw materials sectorXLBRaw materials sector
Сектор сырья 2Х – ПадениеSMNRaw materials sector
Сектор сырья 2Х – РостUYMRaw materials sector
Индекс компаний “чистой” энергетикиPBWEnergy sector
The solar energy sector of the worldTANEnergy sector
Energy sectorXLEEnergy sector
Сектор энергетики 3Х – РостERXEnergy sector
US Energy SectorIYEEnergy sector
KBW American Banks IndexKBEFinancial sector
American Regional Banks IndexRKHFinancial sector
Index of American Regional Banks KBWKREFinancial sector
Broker-Dealer Sector USAIAIFinancial sector
Sector prof. stock market participantsKCEFinancial sector
Regional Banks SectorboyFinancial sector
Financial services sectorIYGFinancial sector
Financial sectorXLFFinancial sector
Financial sectorIYFFinancial sector
Financial sectorVFHFinancial sector
Financial Sector 2X - DropSKFFinancial sector
Financial Sector 2X - GrowthAPPFinancial sector
Финансовый сектор 3Х – ПадениеDOESFinancial sector
Финансовый сектор 3Х – РостFASFinancial sector

Natural resources

Raw material 2XDYYRaw material 2X
Commodity Markets IndexDBCCommodity Markets Index
Market basket index. GoodsDBAMarket basket index. Goods
Commodities and Global CommoditiesRJACommodities and Global Commodities
Raw materials and commoditiesGSGRaw materials and commodities
Industrial metals (Zinc, aluminum, copper)DBBIndustrial metals
Agricultural. Goods 2XDAYAgricultural. goods
Gasoline (USA)UGAGasoline (USA)
Gold X2GLDGold
Gold X2 - FallDZZGold
Natural gas (USA)ROTTENGas, oil + gas
Сектор нефти и газа 2Х – ПаденияDUGGas, oil + gas
Сектор нефти и газа 2Х – РостYOUGas, oil + gas
Нефть X2 – РостDXOOil
Нефть Х2 – ПадениеSCOOil
Oil X2 - GrowthUCOOil

Country ETFs ( Exchange traded funds )– Exchange Traded Funds

Austria Stock IndexEWOOther country
Belgium stock indexEWKOther country
Germany stock indexEWGOther country
Hong Kong Stock IndexEWHOther country
India Stock IndexINPOther country
Spain Stock IndexEWPOther country
Italy stock indexEWIOther country
Latin America S Stock Index&P Latin America 40ILFOther country
Malaysia Stock IndexEWMOther country
Mexico Stock IndexEWWOther country
Netherlands Stock IndexEWNOther country
Oceania Stock Index (without Japan)EPPOther country
Russian stock indexRSXOther country
Singapore Stock IndexEWSOther country
United Kingdom Stock IndexEWUOther country
Taiwan Stock IndexEWTOther country
France stock indexEWQOther country
Switzerland stock indexEWLOther country
Sweden Stock IndexEWDOther country
South Australia Stock IndexEWAOther country
South Korea Stock IndexEVEOther country
Brazilian Stock IndexEWZOther country
Индекс индийских акций “Дерево мудрости”EPIOther country
China Stock Index (FTSE/Xinhua China 25)FXIOther country
China Stock Index (FTSE/Xinhua China 25) X2 – ПадениеFXPOther country
Index of Japanese stocksEWJOther country
Nasdaq-100 IndexQQQQUS Indices
Index S&P500SPYUS Indices
Index S&P500 X2 FallSSOUS Indices

Global ETFs ( Exchange traded funds )– Exchange Traded Funds

New Frontier Global Dynamic Balanced IndexPCAGlobal ETFs
Index 1000 largest non-US companies (Bank of New York Europe index 100 ADR)PEFGlobal ETFs
Nasdaq-100 Index FallQIDGlobal ETFs
Russel Index (акции “роста”)IWPGlobal ETFs
Russel Index 1000 (Акции “роста”)IWFGlobal ETFs
Russel Index 2000 (Акции “роста”)IWOGlobal ETFs
Index S&P 500 акций “роста”IVWGlobal ETFs
Asian ADR Index (Bank of New York Asia index 50 ADR)ADRAGlobal ETFs
Asian Stock Index S&P Asia 50THATGlobal ETFs
Индекс акций “роста”VUGGlobal ETFs
Индекс акций “роста” средней капитализации MidCap 400IJKGlobal ETFs
World Stock Index (without USA)VOICEGlobal ETFs
Developed Countries Equity Index (without USA) (MSCI EAFE)EFAGlobal ETFs
American Closed-End Funds Index (индекс Claymore CEF Index)GCEGlobal ETFs
European ADR Index (Bank of New York Europe index 100 ADR)ADRUGlobal ETFs
Index of European stocks S&P Europe 350IEVGlobal ETFs
European Emerging Markets Index S&PGURGlobal ETFs
Developed Countries Index (without USA)SEEGlobal ETFs
Fund of leading European companies (Dow Jones Euro Stoxx index 50)DIDGlobal ETFs
Fund of leading European companies (Dow Jones STOXX Index 50)FIREGlobal ETFs
Fund of leading European companies (MSCI Europe Index)VGKGlobal ETFs
Fund of leading European companies, members of the Economic and Monetary Union (MSCI EMU index)EZUGlobal ETFs
Fund of leading European companies, traded on the US marketEKHGlobal ETFs
Oceania Leading Companies Fund (MSCI Pacific Index)VPLGlobal ETFs
Money market fundUEMGlobal ETFs
High risk fund (index S&P Target Risk Aggressive)AOAGlobal ETFs
Reduced risk fund (index S&P Target Risk Moderate)AOMGlobal ETFs
Moderate Risk Fund (index S&P Target Risk Growth)AORGlobal ETFs

The whole world of ETF index funds on the map

Fund nameDesignationDaily. turnoverAssets, $

Popular global ETFs

Market Vectors AgribusinessAMEX: MOO1M944M
iShares S&P Global 100 IndexNYSE: IOO281K893M

Popular ETFs in Emerging Markets

Vanguard Emerging Markets StockAMEX: pre-university education3.6M5.9B
BLDRS Emerging Markets 50 ADR IndexNasdaq: ADRE500K505M
iShares MSCI Emerging Markets IndexAMEX: EEM12K23M

Popular BRIC ETFs

Claymore/BNY BRICNYSEArca: EEB430K610M

Popular ETFs from other countries

iShares MSCI Brazil Index
iShares MSCI Mexico Invstbl Mkt Index
iShares MSCI Canada Index
AMEX: EWC2.2M1.72B
South Africa
iShares MSCI South Africa Index
AMEX: EZ360K370M
Latin America
iShares S&P Latin America 40 Index
AMEX: ILF2.7M2.23B

Europe ETF ( Exchange traded funds )– Exchange Traded Funds

Fund nameDesignationDaily. turnoverAssets, $

Popular ETFs in Europe

iShares S&P Europe 350 IndexNYSEArca: IEV720k1.60B
iShares MSCI EMU IndexNYSEArca: EZU596k953.51M
Vanguard European StocksNYSEArca: VGK489k2.13B
SPDR DJ Euro STOXX 50NYSEArca: DID232k224.10M

Popular European ETFs

Market Vectors Russia ETF
NYSEArca: RSX1,770k861.27M
iShares MSCI Germany Index
NYSEArca: EWG1,100k601.16M
United Kingdom
iShares MSCI United Kingdom Index
NYSEArca: EWU957k748.44M
iShares MSCI Italy Index
NYSEArca: EWI285k156.92M
iShares MSCI Austria Index
NYSEArca: EWO286k184.46M
iShares MSCI Switzerland Index
NYSEArca: EWL277k385.53M
iShares MSCI France Index
NYSEArca: EWQ251k294.61M
iShares MSCI Sweden Index
NYSEArca: EWD213k188.38M
iShares MSCI Spain Index
NYSEArca: EWP203k342.39M
iShares MSCI Netherlands Index
NYSEArca: EWN109k191.01M

Asia ETF ( Exchange traded funds )– Exchange Traded Funds

Fund nameDesignationDaily. turnoverAssets, $

Popular Asian ETFs

iShares MSCI Pacific ex-JapanAMEX: EPP823K2.60B
Vanguard Pacific Stock ETFAMEX: VPL584K1.45B
SPDR S&P Emerging Asia PacificAMEX: GMF40K163.7M
iShares S&P Asia 50 IndexNYSE: THAT40K36.00M

Popular Asian ETFs

iShares FTSE/Xinhua China 25 Index
iShares MSCI Japan Index
iShares MSCI Taiwan Index
South Korea
iShares MSCI South Korea Index
Hong Kong
iShares MSCI Hong Kong Index
AMEX: EWH6.7M1.46B
iShares MSCI Singapore Index
AMEX: EWS3.0M1.20B
iShares MSCI Australia Index
AMEX: EWA2.6M852.91M
iShares MSCI Malaysia Index
AMEX: EWM1.8M381.36M
iPath MSCI India Index

America USA ETF ( Exchange traded funds )– Exchange Traded Funds

Fund nameDesignationDaily. turnoverAssets, $

Popular US ETFs

SPDR S&P 500AMEX: SPY364M91.90B
PowerShares QQQNasdaqGM: QQQQ229M18.09B
iShares Russell 2000 IndexAMEX: ETC.124M16.21B

ETF, correlated with underlying assets

SPDR Gold Shares
NYSE: GLD19M21.47B
iShares Silver Trust
AMEX: SLV8.0M2.87B
United States Oil
Natural gas
United States Natural Gas

Most liquid industry ETFs in the US

Financial Select Sector SPDRAMEX: XLF237M11.7B
Energy Select Sector SPDRAMEX: XLE46.5M8.00B
Materials Select Sector SPDRAMEX: XLB14.1M1.39B
Semiconductor HOLDRSAMEX: SMH13.5M1.05B
Industrial Select Sector SPDRAMEX: XLI12.4M1.60B
Technology Select Sector SPDRAMEX: XLK11.4M2.34B
Oil Service HOLDRSAMEX: OIH11.3M2.77B
Retail HOLDRsAMEX: RTH8.7M427M
Consumer Discretionary SPDRAMEX: XLY8.2M1.05B
Utilities Select Sector SPDRAMEX: XLU7.0M2.22B
Health Care Select Sector SPDRAMEX: XLV6.0M2.39B
Consumer Staples Sector SPDRAMEX: XLP5.3M2.91B
Regional Bank HOLDRsAMEX: RKH3.0M453M
Pharmaceutical HOLDRSAMEX: PPH1.0M1.65B
Biotech HOLDRsAMEX: BBH208K1.47B
Internet HOLDRsAMEX: HHH84K292M

Информация по фондам ETF предоставлена Инвестиционной компанией “DUNTONSE“

ETF types ( Exchange traded funds )– Exchange Traded Funds

For that, to effectively choose one or another ETF for trading, a novice investor or speculator needs to clearly structure an array of ETFs, represented on the stock market.
The following types of ETFs are presented on the stock market: Stock ETF, Commodity ETF, Bond ETF, Currency ETF, Index ETF, Reverse ETF, ETF with rate of change.

    • Stock ETF - security paper, which displays the dynamics of a certain set of shares. Mostly, ETF data displays a set of stocks according to a particular industry or country. It could be, for example, energy sector, industrial sector. Or ETFs may include stocks, issuers located in China.
    • Commodity ETF - ETFs, which displays the price of physical goods. These goods can be agricultural products., natural resources and also valuable metals. A commodity ETF is primarily focused on a specific commodity. At the same time, such an ETF may be based on a physical commodity., which is in a specific storage location. Also, a commodity ETF can be based on a futures contract for the corresponding commodity.. Less common ETFs that display commodity indices in their value, which, in turn, can be calculated on the basis of a variety of goods in the form of a combination of physical goods and various derivatives.
    • Bond ETF. Bonds are the underlying asset for ETFs of this type.. This, in turn, allows you to trade debt financial instruments through the stock market.
    • Currency ETF - ETFs, which displays the value of the corresponding currency. This type of trading fund provides the ability to trade currency pairs, without entering the Forex market.
    • Index ETF - ETFs, which displays the dynamics of a specific index, so close, as much as possible. Certainly, an index ETF can trade at a discount or premium to the index. But these time periods are very small, because very quickly the difference is leveled by arbitration on the part of institutional investors.
    • Reverse ETF – ETF constructed with a variety of derivatives. The purpose of this design is to form a feedback between the ETF price and the corresponding index or set of shares.. What does, if a certain index has a downward trend, then the reverse ETF will grow. And vice versa, if a certain index has a growing dynamics, then the reverse ETF will fall. This type of ETF is very often used by institutional investors., which have restrictions on trading short positions. That's why, to hedge your risks in case of market or sector falls, institutional investors can buy this type of ETF.
    • ETF with rate of change. These ETFs are based on a variety of assets. At the same time, the main feature of these funds is the presence of a certain coefficient of change of this ETF in relation to the underlying asset. This coefficient, usually, has the meaning 2 or 3. Therefore, this type of ETF can be called double or triple.. I.e, if we are considering a double ETF, then it grows twice as much, how its underlying asset is growing. And accordingly, the fall of this ETF will be twice as large as the fall of its underlying asset. These ETFs allow for more aggressive speculation, at the same time, the risks of trading with these instruments are also increased.

At the same time, a single ETF can combine the characteristics of several types, presented above. It could be, for example, index inverse ETF at odds 3. Direxion Daily S meets these characteristics&P 500 Bear 3X ETF (SPXS).

The table below shows examples of the described types of ETFs.

View ETF



Stock ETF

Industrial Select Sector SPDR ETF


WBI Tactical High Income Shares ETF


iShares MSCI Australia


Commodity ETF

United States Natural Gas


iShares Gold Trust


United States Brent Oil


Bond ETF

iShares 20+ Year Treasury Bond


iShares 7-10 Year Treasury Bond


iShares National Muni Bond


Currency ETF

iShares Currency Hedged MSCI Japan


iShares Currency Hedged MSCI Canada


Index ETF



PowerShares QQQ ETF


iShares Russell 2000 Value


Reverse ETF

Direxion Daily Jr Gld Mnrs Bear 3X ETF


Direxion Daily S&P Biotech Bear 3X ETF


Direxion Daily Energy Bear 3X ETF


ETF with rate of change

Direxion Daily FTSE China Bull 3X ETF


Direxion Daily Energy Bull 3X ETF


Direxion Daily S&P 500 Bear 3X ETF


TOP 9 ETF of funds by popularity (capitalization)

  • Infographics: TOP-9 ETF of funds by popularity (capitalization)
  • SPDR S&P 500 ETF.
  • iShares Core S&P 500 ETF.
  • Vanguard Total Stock Market ETF.
  • CRSP US Total Market Index.
  • Invesco QQQ.
  • Vanguard FTSE Developed Markets ETF.
  • iShares Core U.S. Aggregate Bond ETF.

What is better than stocks or ETFs?

Promotions give you more control over your individual investments and allow you to invest in and potentially influence the management of individual companies in your portfolio, while ETF allow you to either track a larger market index, or rely on the experience of, who manages the fund.

How ETF Funds Work?

An authorized member buys a large package ETF on the open market and transfers them to the depository, getting back an equivalent basket of individual shares, which can then be sold on the open market or returned to its lender.
How ETF works

Investment fund purchases a large diversified portfolio of assets, and then sells it piece by piece. For this, the fund issues its own shares.. I.e, by buying one ETF share, an investor invests money in several attractive instruments at once.

A simple analogy: allowable, you want to try some exotic dish. The ingredients are expensive for him., and some can only be bought in bulk. Besides, you are not sure, how exactly this dish should be prepared. In this situation, it is easier to order it in a cafe.. There in the kitchen there are all the necessary products, a professional chef has already prepared a large saucepan and will be happy to serve you a couple of plates. And this is not a luxury, and savings: one serving of the dish will cost you less than even the most profitable wholesale purchase.

The same happens with ETFs.:

  • first, the fund professionally prepares a "big pot" - analyzes risks and collects an investment portfolio,
  • then he sells to each shareholder his "plate" - a share,
  • in which all the "ingredients" are present - the share of all the assets of the fund.

In this way, ETF is a convenient way to reduce risk and use many instruments at the same time.

There is a tool similar to ETF - mutual fund. It allows you to pool capital with other investors and get a share in the total assets of the fund.. When choosing between mutual funds and ETFs, keep in mind the differences, for example, in costs.

What ETFs can you buy?

The first ETFs appeared on the Moscow Exchange in April 2013 of the year. Now there is represented 15 ETF from two asset management companies. The list of available funds can be found on the Mosbirzh website (1), and full information on them - on the website of the providers (FinEx (2), ITI Funds (3)).

Let us briefly outline the possible directions of investments and the names of the funds., which correspond to them.

Country-specific stock index

USA (FXUS), United Kingdom (FXUK), China (FXCN), Germany (FXDE), Japan (FXJP), Australia (FXAU), Kazakhstan (FXKZ).

The Russian RTS Index is based on 2 ETF fund: FXRL and RUSE.

A specific branch of the economy
FXIT - its index includes only shares of American IT companies (Apple, Microsoft, Visa, Mastercard, IBM, etc.)

Russian corporate Eurobonds (FXRB, FXRU, RUSB): Gazprom, Sberbank, Rusnano, Lukoil, etc..

Short-term US Treasury bonds (FXMM)

Gold (FXGD)
How to choose an ETF

The general recommendation for an investor when choosing an ETF is to choose that market and industry, which are interesting to him, are well understood and according to which he owns the forecasts of experts.

But it may be so, that the economic situation is unstable, there are prerequisites for, that even a familiar market will "storm". In this case, it is most reasonable to choose an ETF on a stable asset - gold.. Another plus of buying ETFs for gold is VAT exemption., which would have to be paid in the usual procedure for buying precious metals.

Most ETFs — index, that is, it is a tool for long-term investment. Trade ETFs in Brief- and in the medium term it makes no sense. Other tools are suitable for this purpose., for example, index futures. Or the so-called shoulder ETFs, which, although tied to the index, but traded with borrowed funds, increasing both potential profit, and potential losses.

Before using any tool, including ETF, the investor needs to figure out the basic things, concepts, technical analysis - you can study on your own or resort to the advice of a professional consultant.

How much does an ETF share cost?

so, buying ETF allows you to invest in international stock market and buy shares of leading companies, as well as bonds and gold. Exist 2 ETF stock price type: settlement and market.

The formula for determining the estimated price is simple: the net asset value of the fund is divided by the number of shares issued by the fund.


The hypothetical fund has 1 company X share and 1 share of company Y - by 300 rubles each.

The fund's net asset value will be 300 + 300 = 600 rubles.
If released 300 Shares, then the estimated price will be 2 ruble per share.

The net asset value of real ETF funds and the estimated prices of their shares can be found on the websites of their providers..

In addition to the estimated price, the market price of the share is also important - that is, that, which is actually offered for it on the stock exchange. It is regulated by market makers. These are liquidity providers, which support a certain trading volume and spread. Their function is regulatory.

You can even buy one share of an ETF fund on the Moscow Exchange. Their price is from 180 to 4150 rubles apiece. The average market price changes many times per day, up-to-date information can be found on the Mosbirzh website .

As you can see, the entry threshold is really low - buying an ETF is cheaper than collecting a similar diversified portfolio on your own. For example, gold on the Moscow Exchange costs about 2780 rubles per gram, you can buy a minimum 10 grams. For comparison: 1 gold ETF share is worth about 600 rubles.

How to buy ETF

Anyone can buy ETF. Some civil servants are an exception., who are prohibited from using foreign financial instruments (and ETFs are considered just like that) - heads of state departments, FSB employees, etc..

You can buy several ETFs at once and make a well-diversified investment portfolio from them. This requires a brokerage account or individual investment account. (IIS). You can open an account with any broker. You will give him instructions for buying and selling on the exchange..


If you are planning a long-term investment (that is, ready at least 3 keep money in the account), then choose IIS more profitable: it can be used to return NDFL on 13% from invested funds or not to pay personal income tax on investment income.
Two more important parameters:
  • Costs. When trading ETFs, they are negligible.: exchange and brokerage commissions are measured, respectively, tenths and hundredths of a percent of the invested funds.
  • taxes. Received investment income from ETF (as well as from other financial instruments) taxed at the rate 13%. This amount broker withholds and transfers to the budget independently (if the investor is not exempted from personal income tax for using IIS).

What determines the profitability of ETF shares

Making a decision, which assets will be included in their portfolio, ETFs most often rely on a specific stock index.

Index Is not a number, and the list. Namely - a list of companies, whose securities the exchange or the fund itself considers important. It is also called the index basket..

Key indicator - index value. This is already some hypothetical number., which for different indices is calculated in different ways. Absolute index values ​​are not important. Only his fluctuations in time matter.: they reflect the general condition of assets, companies included in the index. If securities get cheaper, the index falls - and vice versa.

The MSCI USA Index includes stocks 622 the largest and most profitable US companies. Its value reflects the general state of the American stock market.. What is higher, the better and more expensive the shares are sold. With 2016 on 2018 year the value of the MSCIUSA index increased (6)c 2 535 points to 3 0780 points (21%).

By choosing an index, ETFs buy securities from their member companies (there can be hundreds of them - a complete list of assets for each fund can be found on the provider's website (7)). In this way, fund shareholders in each of them receive their share, and the share price is tied to the index value.

As you can see, investing in ETFs, easy to track the profitability of your investments. If the index rose by 10% - ETF shares rise in price by the same amount. The exact dependence and profitability of shares can also be found from the fund's documentation on the provider's website..

ETFs and sanctions
Since ETF is an international financial instrument, investors may be worried, will the sanctions pressure affect the profitability and safety of investments?.


  • ETFs are an easy and relatively inexpensive way to diversify your portfolio.
  • To trade ETFs, you need a brokerage account or IIS.
  • On the Moscow Exchange traded 15 ETF. You can invest in stocks, bonds and gold.
  • It's easy to buy ETFs - you can do it through a broker.
  • ETF is a long-term investment tool.
  • Sanctions have no negative impact on ETFs available to a Russian investor.

Author: Trader

Personal blog of a professional trader on the US stock exchange (NYSE, NASDAQ, AMEX ) Dmitry Gavrilov. Started his career at NYSE (New York Stock Exchange) in 2008 years in prop company . With 2009 of the year became a senior trader of the largest prop in Russia and began to train traders of the company. With 2011 of the year was a trader of GT Capital Group with the support of SMB Capital (USA).