FUTURES TRADING & ONLINE REAL TIME TRADE

ETF: a new way of investing in Finantial markets

The ETF funds allow the small investor on the stock exchanges operate in countries like China or India and leveraging its strong economic potential

Although Europe futures markets will cost saver still look outside their borders in search of opportunities, the truth is that the current globalization of markets can invest in any stock exchange, however exotic it may seem. China, India, Mexico, Brazil ... Benefit from the significant economic potential of these economies is already at the fingertips of the small investor Spanish. To do this, one of the latest products that have begun to market are known as ETF funds. "These are funds that can be bought and sold on the market as if it were an action. Its cost is much smaller than direct investment in the stock of China or India, on the other hand, have still many bureaucratic hurdles that impede the private savings to invest in them. ETF funds bet on the best way to approach emerging markets with more potential. However, as any product that carries the risk, it is knowledge of their functioning" explains Jose Antonio López-Esteras Camacho, from Ciampi Group consulting in spain.

What is ETF?: The ETF (symbol corresponding to the English expression "Exchange-Traded Funds), like mutual funds traded. They are, therefore, traditional investment funds, but this funding is traded on the floor as stocks. In fact, its main feature is that you can buy and sell on the day as if it were an action. That is, the investor can invest as easily in Telefónica and Santander in a fund ETF. At the moment the supply of ETF market is limited and few entities. However, as it is a publicly traded product, can be contracted through any financial intermediary or entity that provides investment services (corporate and securities dealers, brokers on-line ...) The main objective of the ETF is to replicate an index, ie, reproducing as nearly as possible the evolution that has a specified stock index. Therefore, the option becomes more attractive to invest in hard to reach distant markets for individual investors.

ETFs can be bought and sold on the day as if it were an action. As with stocks, the price of the ETF varies continuously throughout the day, depending on supply and demand. The investor's may sell when you want, during the negotiation of the stock market in which they are trading, giving the sales order to your financial intermediary. Limited Offer: At present, some countries have sold 20 different ETF funds. For now, replicated indexes Spanish, European, American, and emerging market debt. Specifically, the EFT on the Ibex-35 (the main index of the country stock exchange) are the bottom Ibex Action BBVA ETF, the fund Lyxor ETF Ibex 35, Ibex-35 ETF Santander, Santander ETF Ibex and Mid Caps Flame ETF Ibex Small Caps. About the Euro Stoxx 50 (the main stock index in the euro area) are traded ETF's BBVA Action DJ Euro Stoxx 50 and the Lyxor ETF DJ Euro Stoxx 50. U.S. indexes are traded on the Nasdaq and Lyxor Lyxor ETF Dow Jones. Also traded on the index ETF Latibex (Latin American stock index priced in euros). Action Fund are the FTSE Latibex BBVA and BBVA ETF FTSE Action Latibex Brazil. In addition, there are two ETF funds that replicate fixed income indices (AFI BBVA are Medium Term Bonds in Euro and the Euro Monetary BBVA-AFI).

The cost of the ETF: The price paid for acquiring a stake in an ETF fund depends on the assessment made by each manager. In addition, we must take into account a number of associated expenses. For example, all these funds apply a management fee ranging between 0.15 and 0.5%. They are therefore lower than those charged by traditional funds, which on average are about 1.2%. As it is a publicly traded product, the individual investor will also have to deal with the brokerage commission that imposed by the intermediary to sell its stake in the fund.  Gold, silver and oil are commonly traded commodities. Worldwide based firms offering trading opportunities platforms in global commodity and stock index markets. Commodity Warrants Europe and Asia. The Commodity Warrants Gold Commodity ... the spot market and trading futures market is the timeframe of the transaction for real time and online search for products and suppliers.

Risks and tips on new markets

As usual, not all are virtues for Treasury Bills. One of the disadvantages with which you can find the saver is that there are very few institutions that offer this product to their customers. In general, savings banks and get little benefit to the marketing of debt, hence it is not working to promote its subscription. The channels for acquiring lyrics in which the investor may receive more detailed information on this product is practically reduced to two: the Central Banks or the Treasury 'on-line. The Bank of Spain and its offices spread throughout the country sell different types of assets public debt (not just lyrics, but also notes and bonds). Through the Internet, the Treasury also gives the possibility to buy public debt. However, in this case the entity requires to have a digital certificate from the Mint and Stamp. It should also be borne in mind that the lyrics can be purchased through various procedures, as is done in the time of issue or later. If you choose to purchase at the time of the broadcast can be done through the Central Bank or financial intermediaries. In this case, the request must be made at auction system established by the Treasury to issue debt. If, on the contrary, it makes the purchase when the title already issued, the broker to which the saver go buy those securities at market price at the time, plus commission charged by the entity.

In the event go directly to the Bank  to buy debt is necessary to open an account and choose between the two procedures are possible. The first alternative is to pay purchase only 2% of the subscription period, usually until two days before the auction, and pay the rest a few days after the auction. In this case, we can give the drawbacks of the saver if the payment is delayed or ultimately decided not to attend the auction, you will lose advancement. The other option is to pay 100% for the lyrics, or the rate specified in the issuance of each auction or Obligation Bond. Another aspect to be considered in the acquisition of the lyrics is that to receive the return agreed in the auction, the saver must maintain their investment in the asset's payback time, ie one year. If you wanted to undo before your investment and get your money, you should see the secondary debt market, in which the sale price will likely be different. The sale in this case may not be immediate, but can spend a day or several hours to get disinvestment.

Beware of long-term debt

In this context, however, be careful with the products issued in the longer term, such as bonds and obligations, and mutual funds over fixed income. This is because bond funds suffer if long-term interest rates rise, as if they had to sell these titles now be worth less than they would offer the new issues and therefore would have to take special care: Jose Antonio Lopez-Esteras Camacho says that "at this point in the economic cycle is important to take active positions in short-term, because long-term bonds are more affected by rising interest rates." In his view, interest rates reach their highest point in this cycle next year. A test that indicates that the rise in interest rates affect the public debt issued in the longer term is in the fall of profits they offered the latest auctions. In its last issue, the bonds 10 years have set their interest rate at 3.956%, contrasting with 4.105% of the previous auction. The obligations have risen from 15 years to offer a 3.711% to produce a rate of 3.702%. In the secondary market debt funds that invest in government bonds are undesirable at this time. The fall in bond prices has prompted fixed-income funds have retreated by 1.6% during the year, according to Morningstar.

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