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Exchange Traded Funds

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 ETFs are the Hottest Investment Vehicle in the Market Today!

WebsiteTip: In a hurry, just read the sentences in bold for a quick summary.
 
The corrections to the market since 2000 decreased the value of many stock Index Funds at some point by 50% or more.
 
The Performance Section shows when using actual and historical data during this period the Fund Trading System achieved large returns compared to a Buy and Hold strategy.
 
An Exchange Traded Fund Active Investing Strategy supported by Fund Trading can be a superior strategy to increase returns and control risk in unpredictable markets.
 
 
 
 "ETF's are the investment vehicle of choice...  
                                                              for the Fund Trading System"
      
Exchange Traded Funds are commonly known as ETFs. They may be one of the most successful investment products we have seen. Assets in ETFs have quadrupled since the beginning of 2002 to more than $360 billion, and they show no sign of slowing down.
 
Like traditional Index Funds they are made up of a pool of securities that track the performance and dividend yield of specific indexes. The Exchange Traded Funds we use track the four U.S. stock Indexes that we trade with our Model Portfolios, they are the Nasdaq 100, Russell 2000, S&P 500 and the S&P 400 along with a number of key International and sector ETFs. Other ETFs can be used with good success too. Stock indexing was developed in the 1970s and due to its low cost and tax efficiency has been increasingly used by institutional and individual investors.
 
Index ETFs provide you diversification with little or no capital gains distributions, unlike Mutual Funds which often sell stock
holdings to raise cash. ETFs also have substantially lower expenses than traditional mutual funds. 
 
ETFs are tax efficient, they benefit from redeeming shares for baskets of the underlying securities. This process is called "in-kind redemption", which is not a taxable event. ETFs also have very low expenses, with an average expense ratio of 0.4% compared to 1.3% for traditional mutual funds and 0.7% for traditional index mutual funds.
 
ETFs are Transparent, disclosing their holding on a daily basis, so you always know what you own. Mutual funds on the other hand are not required to continually disclose their holdings. Mutual Funds often have restrictive trading policies which can trigger costly fees if not followed. 
 
ETFs offer superior flexibility, they trade like a stock allowing you to trade anytime during normal business hours. This includes market orders, limit orders, stop orders, short sales and margin accounts.  
 
This flexibility and diversification make Exchange Traded Funds one of the best vehicles for the Fund Trading Active Investing Strategy.
 
 
 
                  "ETFs can give you Better Returns than Mutual Funds!"
 
The following Index Exchange Traded Funds are the preferred investment vehicle for use with the Fund Trading System. These Funds can be used for all of the recommended Fund Trading Investment Strategies.
 
After a Signal is received, Exchange Traded Funds can be purchased at the stock market open, giving them a slightly better return than Mutual Funds, which can not be purchased until the end of the day. The Mutual Fund purchase delay causes greater slippage, the change in price between the time a signal is received and the purchase is completed.
 
Although Exchange Traded Funds have less slippage, they are not recommended for IRA or 401(k) strategies due to government regulations that do not allow shorting or investing on margin in qualified retirement accounts. To use Exchange Traded Funds for your IRA, see the alternative Simple Trading Method outlined below. Also, review the IRA and 401(k) Sections for their own unique strategies.
 
Do you find Shorting the Stock Market too complicated or you do not want to use Margin? No Problem...Use our alternative Fund Trading Simple Method based on Inverse Exchange Traded Funds!
 
If you like Easy... the Fund Trading Simple Trading Method is for you!
 
The Fund Trading Simple Trading Method offers the option of using Inverse Exchange Traded Funds that increase in value when the market goes down. Giving you the effect of Shorting without the hassle! No margin and No margin interest! And they offer leverage of up to double (200%) of daily index performance for both Long and Short trades.  
 
               Look for Step by Step Trading Instruction for the
             Simple Trading Method in the "How To Trade" section. 
 
Why would I use leverage? Margin or leverage allows you to increase the impact of your investment. One strategy I like is to cut in half the amount you would normally invest and use a 200% leveraged fund to get a similar dollar return. At the same time invest the remaining half of your investment into a high yielding Money Market Fund or Bond Fund. This increases your return as well as reducing the risk to you total portfolio.
  
 
After receiving a new signal, your Exchange Traded Fund order should be placed before the market opens or at market open. This allows you the flexibility to place the order the night before or first thing in the morning.
 
Visit the "How To Trade" section for step by step instruction on trading Exchange Traded Funds, the Current Recommended Portfolios and the weighting for each fund. 
 
  

         Recommended U.S. Exchange Traded Funds Used In 2008

               
The Fund Trading System is designed to split your U.S. investment funds 50% / 50% between the Nasdaq 100 and the S&P 500 or Russell 2000. An alternative would consist of investing one third each in the Nasdaq 100, Russell 2000 and S&P 500. The S&P 400 can be substituted for the S&P 500. We recommend investing as much as 60% of your portfolio in U.S. funds. The portfolios are updated every year to adjust to market conditions, see the member section for current portfolios.

 
       Index                     Symbol        ETF Symbol
  Nasdaq 100 
     NDX  
      QQQ
  Russell 2000  
     RUT 
      IWM
  S&P 500 
     SPX 
      SPY
  S&P 400

     MID 

      MDY

 
      

   Recommended International  Exchange Traded Funds  

                
We have selected the following International ETFs because they correlate well with the Market Trend Trading System. We recommend investing as much as 40% of your portfolio in international funds. The portfolios are updated every year to adjust to market conditions, see the member section for current funds and portfolios.
 
Country ETF  ETF Symbol
Brazil  EWZ
Canada EWC
China 25 FXI
Emerging Markets  EEM
Europe/Asia EFA
Germany EWG
Latin America 40 ILF
Pacific Rim EPP
     
  
 
 

         Exchange Traded Fund Global Portfolio Trading Strategies

 
 
Fund Trading provides complete Global Portfolios with Step-By-Step
Trading Instruction in the "How To Trade" section.
 
Fund Trading includes (4) Trading Strategies to provide you
the right level of Return and Risk.
 
         
  Strategy 1   Conservative   Long Only
  Strategy 2   Growth   Long and Short
  Strategy 3   Aggressive   Long with Margin
  Strategy 4   Speculative   Long & Short w/ Margin
                    
Trading Strategy 1 is the most conservative, your are only in the stock market when the Trading System indicates a Buy Signal. You protect your principal in down stock markets by moving into a secure interest bearing Money Market Fund or Government Bond Fund.
 
Trading Strategy 2 is designed for Growth by profiting when the stock market is going up or down. Over time profits have been shown to increase about 30% over Strategy 1 with a manageable increase in risk.
 
Trading Strategy 3 is more Aggressive. It is similar to Strategy 1, you are only in the stock market when the Trading System indicates a Buy Signal, but with the leverage of Margin. You protect your principal in down stock markets by moving it into a secure interest bearing Money Market Fund or Government Bond Fund. Our performance results are based on 100% Margin, which doubles your potential for gains and losses. Margin increases the risk of this strategy over Strategy 2. Using a smaller percentage of Margin can greatly reduce your risk.
 
Trading Strategy 4 is considered Speculative. It is similar to Strategy 2, you are in the stock market when it is going up or down, but with Leverage or Margin. Our performance results are based on 100% Margin, which doubles your potential for gains and losses. Using Margin in up and down stock markets increases the risk over Strategy 3. Using a smaller percentage of Margin can greatly reduces your risk. 
 

       Our Global ETF Portfolios Are Updated Throughout The Year 

 
Portfolio returns are enhanced and global risk is reduced when traded with our trading signals which indicate when to move in and out of the funds during the year. ETF Contrarian (reverse fund) and ETF Leveraged portfolios are available in the member only "How To Trade" section.
 
Note: The ETF portfolios listed below can be used with any of our four trading strategies. This allows you to better balance risk through both the trading strategy and the funds traded in your portfolio. The portfolios are updated every year to adjust to market conditions, see the member section for current portfolios. Below is an example of the portfolios we used in 2008. Our newer portfolios now include Sector Funds.
 
Global Conservative Portfolio
 
     Fund                                 
                                        
     Nasdaq 100                       
     Russell 2000                       
     S&P 500                               
     Germany                             
     Canada                               
     Europe/Asia                           
     Pacific                                   
 
Global Growth Portfolio  
 
     Fund                               
 
     Nasdaq 100                        
     Russell 2000                         
     Germany                               
     Europe/Asia                            
     Emerging Markets                   
     Pacific                                    
 
Global Aggressive Portfolio
 
     Fund                               
 
     Nasdaq 100                        
     Russell 2000                          
     Germany                             
     Brazil                                     
     China                                      
     Pacific                                    
                         
 
 
Visit the "How To Trade" section for step by step instruction on trading Exchange Traded Funds, the Current Recommended Portfolios and the weighting for each fund.
 
 
 
 
 
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