Tag: eft

How To Trade ETFs – Best ETF Trading Strategies

Financial markets can be challenging in light of the variety of assets and trading instruments, and an investor may be tempted to purchase multiple securities to seize multiple opportunities and diversify their trading portfolios.

Exchange-traded funds are an excellent portfolio diversification option, allowing investors to buy and sell multiple assets together with a twist. ETFs are considered one of the safest trading methods in the market and a perfect choice for rookies who want to dip their toes in the seas of financial trading. 

Let’s dive deeper into this term and explain some of the best strategies to trade ETFs.

How Do ETFs Work?

Exchange-traded funds collect multiple trading instruments in one pool. These securities may include stocks, foreign currencies, bonds, crypto, etc. The prices of ETFs fluctuate according to the market price of products involved in the exchange fund.

ETFs are a safer trading option because they include multiple securities. If one product underperforms in the market, there is still some chance for other assets to perform better and make up the losses.

Significant financial corporations and institutions purchase massive quantities of securities and deposit them with the ETF provider, who, in exchange, provides shares of the exchange funds.

Then, the investment firm sells these shares in secondary markets for the outer public, where traders can purchase stakes in several ETF pools.

The Best ETF Trading Strategies

ETF trading requires proper planning, which may be slightly different from other instruments. Here are some excellent ETF trading strategies.

Swing Trading 

This strategy entails buying and selling assets depending on the trend fluctuations and benefiting from short-term gains. This can be helpful in ETF trading because it is easier to implement and less risky, given the higher stability provided by the ETF.

Long-term Holding

Buy and hold is a perfect strategy to use in conjunction with ETFs because it implies buying shares in the exchange fund pool and keeping them for an extended period of weeks or months. 

This strategy is supported by the risk-averse nature of ETFs and steady performances over the long run.

Rotation

Rotating between industries is more of an approach than a strategy. This is one way to diversify this portfolio diversification strategy further.

ETFs apply to multiple industries like commodities, cryptocurrencies, real estate, finance, etc. Therefore, a trader may buy shares from different industries, hoping that one market underperformance can be offset by another overperforming one.

Conclusion

Exchange-traded funds are asset pools where investors can buy shares and speculate on the price action of each security in its market. Therefore, take advantage of price stability since one ETF includes multiple assets rather than a single stock or product.

Investment App BUX Zero to introduce Fractional European ETFs

Beginning today, BUX clients will be the first in Europe to be able to invest in fractional European ETFs outside of an investment plan. In partnership with ABN AMRO Clearing Bank, BUX has built the technology that makes it possible to offer fractional investing in European ETFs. This new feature follows shortly after BUX introduced fractional investing to its clients in January 2022.

Fractional European ETF investing lowers threshold for monthly investing

With the introduction of fractional European ETFs, clients are now able to invest with an amount as little as €10. European ETFs with a higher price tag, such as the S&P 500 Index which typically costs €80, thus become more accessible to investors with a smaller budget. This allows all investors, regardless of budget, to invest in different ETFs monthly and minimises the investment risk by offering room to diversify portfolios further.

BUX introduces a total of 20 fractional European ETFs

In addition to the fractional European ETFs, BUX has also added an additional 95 new fractional U.S. stocks to its already existing offering. Well-known names among the U.S. stocks that are now also available to invest in fractionally include Mastercard, PepsiCo and IBM. In the future, fractional investing in European stocks will also become available.

“With the introduction of fractional European ETFs, we can offer more ways for our clients to build a portfolio that fits their needs and goals. Since introducing fractional investing to our clients at the beginning of the year, we have seen a great deal of interest and this demonstrates that the modern investor is embracing diverse investment options. As the economic climate continues to swing in uncertain directions, we want to offer Europeans a solution that allows them to put their money to work in an accessible way,” said Yorick Naeff, CEO of BUX.

“Fractional trading is trading made accessible for everyone. With our unique fractional trading service we are supporting  our clients to offer embedded investment solutions in capital markets, so all their clients can profit. Expanding this fractional trading service offering with European products will open up the EU capital markets for our clients and their investors to create embedded and efficient investment solutions as well,” said Jan Bart de Boer, CCO of ABN AMRO Clearing.

The modern investor at BUX opts for fractional investing

Fractional investing is quickly gaining popularity among clients at BUX. Internal research has shown that since the launch of fractional investing in January 2022, nearly 1 in 7 orders has been a purchase of a fractional share. The undisputed favorite among fractional U.S. stocks is Tesla. Among all age groups, the electric carmaker is the most purchased fractional stock since the beginning of the year. One notable difference is that among female investors, Beyond Meat (9) and Walt Disney (10) have a spot in the top 10 most purchased fractional stocks, while NVIDIA (9) and Shopify (10)  made the top 10 of the most purchased shares by males.

Securitize Launches New ETH Yield Fund as Onramp for Institutional Investors

Securitize Capital, the digital asset management platform offering institutional-grade, tokenized funds, today announced the launch of a regulated ETH Yield Fund, as an onramp for investors to access an important blockchain protocol powering the fast-growing DeFi, NFT and Metaverse ecosystems, with the potential for yield derived from its lending.

“Due to high-profile cases of crypto businesses offering unregulated securities and banking products, there is a misconception that investors cannot access yield from crypto lending in a regulated way,” said Wilfred Daye, Head of Securitize Capital. “Today, investors can access regulated, institutional-grade crypto funds and the potential for yield through Securitize with the ETH Yield Fund opened today, which joins our existing USDC and Bitcoin yield funds.”

With investors chasing meaningful returns amid rising inflation and a roller-coaster stock market, there is growing investor interest in the potential benefits of cryptocurrencies and yield strategies, such as a stablecoin plus yield (USDC Yield) and a portfolio of cryptocurrencies (Securitize-S&P Large Cap Crypto Fund). The ETH Yield Fund provides institutional investors interested in economic exposure to DeFi, NFT and Metaverse ecosystems access consistent with compliance standards. Specifically, investing in the most commonly used Ethereum blockchain powering these technologies is a readily-accessible way for institutions to participate in blockchain-based innovations in a risk-managed way, consistent with Securities and Exchange Commission Regulation D 506(c) and Regulation S 902.

The new ETH fund democratizes investment access with a low 0.5% management fee, and zero performance fee. The fund is open for investment today through Securitize Markets. Lending services will be provided by Securitize’s partner, Anchorage Digital.

 

The new ETH Yield Fund is Securitize Capital’s fifth fund, joining four additional landmark funds launched in 2021, including: