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Author Topic: Okay, hold your horses now, what is the different between Shares and ETFs ?  (Read 175 times)
mohammed7777 (OP)
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July 08, 2020, 10:37:28 AM
 #1

  Okay, hold your horses now, what is the different between Shares and Exchange Trade Funds. Shared are unit of ownership into a specific company  if you shers of any options Al company the you automatically becoming a shareholder of that company
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July 08, 2020, 11:27:03 AM
 #2

Shares are equities. They are sold by a company during an IPO~Initial Public Offering, which is sort of a fund raising and it's done when a company is going public.
An ETF~Exchange Traded fund has some similaities with shares, but ETFs are not traded personally, but rather a means of tracking indexes under the umbrella of a professional, who trades an individual stock or a basket of stocks. You pay a premium or commission to the broker.

ETFs are kind of indirect investments, we can see that with Bitcoin ETFs. They are bought by those who either do not want to, or cannot trade an asset directly due to legal restrictions. ETFs also offers some sort of diversification as multiple assets can be traded together, depending on the AUM of the broker.
Individual shares also has some advantages as you're more in control of your investments and it's easier to track.

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July 08, 2020, 09:23:47 PM
 #3

Shares measure equity ownership, whether we're talking about a publicly traded company or an ETF. Both types of entities issue shares against their underlying value.

In the case of an ETF, ownership of shares is supposed to track the performance of the ETF's underlying assets (for example, GLD tracks the spot gold market). This is generally true, although divergences do sometimes occur, usually due to liquidity differences between markets.

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July 08, 2020, 11:42:18 PM
 #4

ETF have lower taxes in some countries since they are not direct ownership but a stock that holds assets in trust.   It is used as a trading vehicle because of that quite often, a bit like CFD if you heard of those as again it avoids stamp duty.     CFD would be a singular company, contract for difference and ETF is exchange traded fund holding multiple elements usually or tracks the price of a commodity.   Avoid ETN which holds no asset but tracks a price with the promise from a bank of repaying a value based on the market, a bit like a cheque is a promise to pay value on demand for that day.   ETF is the safest of all 3 but can still be risky as we saw with the oil sell off, prices arent always so accurate.

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July 09, 2020, 03:34:02 AM
 #5

ETF means Exchange Traded Fund. They have they name because they are traded in exchanges, just like regular stocks.

ETF prices also fluctuate the whole day, just like stocks or any other traded asset. Usually, ETF tracks an underlying index, such as SP500, Gold, World MSCI, and so on.

ETF are diversified, safer than stocks, low-cost and are a good investment option for beginners.

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July 09, 2020, 02:25:53 PM
 #6

Yep, if you own stocks, you own shares (ownership) of a particular company.
If you own ETF, you own shares (ownership) of a particular basket of securities, including stocks. If your ETF holds common stocks, you are a shareholder of that company, but you cannot attend AGM directly and have to use proxy voting.

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