For a relatively long time, the Moscow Exchange has listed ETF funds placed by the FinEx management company. They cover more than a dozen areas, including German, Australian, American (including technology) markets, gold, etc. ETFs almost completely repeat the basket of world indices, showing stable annual profit. For CIS investors, these funds remain the easiest (if not the only) opportunity to become the real owner of securities with a minimum threshold of entry (several thousand rubles). One of the ETF brokers on the Moscow Exchange is Finam. More information about these funds, their features and benefits will be described in the following reviews. In the meantime, briefly what ETF is.
ETF on the Moscow Exchange
An ETF is an open-ended investment fund whose shares (stocks) are in circulation on an exchange. In essence, they are somewhat reminiscent of mutual funds (mutual funds). ETF is a portfolio formed by analysts of the management company. Any number of portfolios formed in a wide variety of ways can be managed: stocks of other companies, commodity market assets, bonds, etc. The share of the asset in the total portfolio is adjusted depending on the state of the market. The difference from the mutual fund is that the investor does not invest money in the fund, but buys the issued ETF shares. The price of the mutual fund is recalculated daily, the price of ETF shares is influenced by the demand and supply of the underlying asset and adjusted throughout the trading day.
Benefits of investing ETF versus mutual fund:
- openness. All information about the composition of the ETF is on the website of the management company. Quotations of securities can be tracked online at the exchange itself, while the investor will only learn about the results of the mutual fund from periodic reporting;
- low entry threshold. For an ETF, it is equal to the value of one share;
- liquidity. Units of mutual funds can not be sold instantly (to leave the fund, especially if it is closed). Broker allows you to trade ETF as a normal asset. That is, you can buy and sell stocks in a few clicks. If the mutual fund incurs losses, the investor can only watch how his share is getting cheaper. In the case of an ETF, stocks can always be sold and out of stagnation;
- the possibility of trading. Mutual funds are used for investing, ETF stocks can be used for margin trading (open short positions, use leverage);
- clear pricing. Broker earns on the spread. In case of investing in mutual funds, commissions, agency surcharges, etc. are possible.
Finam Broker provides an opportunity to purchase shares of ETF funds on the Moscow Exchange of the sole management company FinEx:
- short-term US government bonds;
- Eurobonds issued by Russian corporations;
- index baskets of different countries in Europe and Asia;
- US IT stocks.
More information about the conditions of investment and the composition of the funds you can find in the management company itself or from representatives of Finam broker. From myself, we add that in order to become an investor, you need to conclude an agreement with a broker, get a platform and follow the instructions of the broker to open a position. The difference from Forex here is that here you become the owner of the real shares stored in the depository. In Forex, you trade CFDs (CFDs).