Different types of ETFs – ETFs simplified | iShares - BlackRock (2024)

Source:

1 Global Business Intelligence, BlackRock, as of 31 May 2021.

2 Diversification does not fully protect you from market risk and does not guarantee returns or eliminate potential for loss.

3 The value of each series of securities will be affected by movements in the price of the commodity to which a particular series of securities is linked, as well as the price of commodities in general, market perception, the creditworthiness of certain Transaction Parties and liquidity of the securities in the secondary market.

4 A derivative is a contract between two or more parties whose value is based on an agreed-upon underlying financial asset, index or security.

5 Counterparty risk is the risk that the counterparty to a derivative could be unable or unwilling to perform its payment obligations.

6 Hedging is a risk management strategy employed to offset losses in investments.

7 Currency hedging is sometimes done as part of a fund’s main investment strategy or within share classes. Currency hedged share classes and funds use derivatives to hedge currency risk. The use of derivatives for a share class could pose a potential risk of contagion (also known as spill-over of risk and liabilities) to other share classes in that fund.

8 With leveraged products, both gains and losses can be magnified. Therefore, the risk of loss may be substantially more than a fund that does not employ leverage. Inverse products track the daily performance of a multiple of the inverse index return. If the value of the index increases, it could have a negative impact on the performance of that product.

This material is prepared by BlackRock (Singapore) Limited (co. registration no. 200010143N) for informational or educational purposes only. This does not constitute an offer or solicitation to purchase or sell in any securities or iShares Funds, nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.

There are risks associated with investing, including loss of principal. The value of investments involving exposure to foreign currencies can be affected by exchange rate movements. Investment in emerging market countries may involve heightened risks such as increased volatility and lower trading volume, and may be subject to a greater risk of loss than investments in a developed country. Investors should be aware that the price of shares of the iShares Funds, and the income from them (if any), may fall as well as rise, and investors may not get back their original investment. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. iShares Funds are not sponsored, endorsed, issued, sold or promoted by their index providers. For details of the index provider including any disclaimer, please refer to the relevant iShares Fund offer document.

This material contains general information only and is not intended to represent general or specific investment advice. The information does not take into account your financial circ*mstances. An assessment should be made as to whether the information is appropriate for you having regard to your objectives, financial situation and needs. Before investing, you should carefully consider the investment objectives, risks, charges and expenses and all other information contained in the relevant offering documents which is available from BlackRock or the iShares websites.

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Different types of ETFs – ETFs simplified | iShares - BlackRock (2024)

FAQs

Different types of ETFs – ETFs simplified | iShares - BlackRock? ›

The types of ETFs are generally categorized by asset class, such as stocks, bonds, commodities and currencies.

What are the different types of ETFs? ›

The types of ETFs are generally categorized by asset class, such as stocks, bonds, commodities and currencies.

What are ETFs for dummies? ›

An exchange-traded fund (ETF) is a basket of securities that trades on an exchange just like a stock does. ETF share prices fluctuate all day as the ETF is bought and sold; this is different from mutual funds, which only trade once a day after the market closes.

Is BlackRock an ETF? ›

The BlackRock Large Cap Value ETF seeks to maximize total return by investing primarily in large capitalization U.S. equities that exhibit value characteristics.

What are ETFs in simple terms? ›

ETFs or "exchange-traded funds" are exactly as the name implies: funds that trade on exchanges, generally tracking a specific index. When you invest in an ETF, you get a bundle of assets you can buy and sell during market hours—potentially lowering your risk and exposure, while helping to diversify your portfolio.

What are the top 5 ETFs to buy? ›

7 Best ETFs to Buy Now
ETFExpense RatioYear-to-date Performance
Global X Copper Miners ETF (COPX)0.65%26.2%
YieldMax NVDA Option Income Strategy ETF (NVDY)1.01%12.9%
iShares Semiconductor ETF (SOXX)0.35%14.9%
Simplify Interest Rate Hedge ETF (PFIX)0.50%22.9%
3 more rows
May 7, 2024

How many ETFs are there? ›

The number of exchange traded funds (ETFs) worldwide grew markedly during the period from 2003 to 2022. There were 8,754 ETFs globally in 2022, compared to 276 in 2003. As of 2022, ETFs worldwide managed assets up to almost 10 trillion U.S. dollars.

How to choose an ETF for beginners? ›

Before purchasing an ETF there are five factors to take into account 1) performance of the ETF 2) the underlying index of the ETF 3) the ETF's structure 4) when and how to trade the ETF and 5) the total cost of the ETF.

What is the best way to explain ETF? ›

An ETF (Exchange Traded Fund) is a diversified collection of assets similar to a mutual fund, though a key difference is that an ETF trades on an exchange throughout the day like a stock. Being relatively low cost, tax efficient, and generally easy to buy and sell, ETFs have become a popular choice for many investors.

What type of fund is BlackRock? ›

BlackRock offers a comprehensive selection of high-strong-performing, low-cost mutual funds, designed to cover multiple asset classes, geographic areas and investment goals. Our clients can invest in funds run by some of the industry's leading portfolio managers, benefiting from their deep experience and expertise.

What is the average fee for BlackRock ETF? ›

Fees
Management Fee0.50%
Acquired Fund Fees and Expenses0.03%
Other Expenses0.00%
Expense Ratio0.53%

Do BlackRock ETFs pay dividends? ›

Generally, net income and dividends received by the iShares ETFs are distributed to unitholders in cash and net realized capital gains are reinvested in the ETF.

How do ETFs work examples? ›

An ETF provider takes into account the universe of assets, such as stocks, bonds, commodities, or currencies, and builds a basket of them, each with its own ticker. Investors can buy a share in that basket in the same way they would buy stock in a firm.

Why ETFs are good for beginners? ›

They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks. The cost to own an ETF may be lower than the cost to buy a diversified selection of individual stocks, too.

What are the disadvantages of ETFs? ›

Disadvantages of ETFs. Although ETFs are generally cheaper than other lower-risk investment options (such as mutual funds) they are not free. ETFs are traded on the stock exchange like an individual stock, which means that investors may have to pay a real or virtual broker in order to facilitate the trade.

What is the most common ETF? ›

Most Popular ETFs: Top 100 ETFs By Trading Volume
SymbolNameAvg Daily Share Volume (3mo)
SQQQProShares UltraPro Short QQQ135,545,203
SPYSPDR S&P 500 ETF Trust66,317,398
SOXLDirexion Daily Semiconductor Bull 3x Shares66,222,352
TQQQProShares UltraPro QQQ65,880,477
96 more rows

What is the 3 ETF strategy? ›

A three-fund portfolio is a portfolio which uses only basic asset classes — usually a domestic stock "total market" index fund, an international stock "total market" index fund and a bond "total market" index fund.

How do you pick the right ETF? ›

Ultimately, investors choosing an ETF need to ask 3 questions: What exposure does this ETF have? How well does the ETF deliver this exposure? And how efficiently can I access the ETF? Look at the ETF's underlying index (benchmark) to determine the exposure you're getting.

Are ETFs good for beginners? ›

The low investment threshold for most ETFs makes it easy for a beginner to implement a basic asset allocation strategy that matches their investment time horizon and risk tolerance. For example, young investors might be 100% invested in equity ETFs when they are in their 20s.

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