ETFs: The Best of Both Worlds?

ByDawn Pipkin

May 11, 2023

There are a few reasons ETFs have generated a lot of trader enthusiasm this year. In times in which many people are still feeling the economic pinch of Covid, ETFs offer the kind of diversification that can help you build a more well-rounded trading portfolio.

ETFs allow traders to focus their funds in sectors or markets of their choice. For example, for traders who want exposure to the clean energy sector, there are ETFs that track companies involved in producing solar and wind energy. Other ETFs track companies at the forefront of Artificial Intelligence. But they also offer finer flexibility.

If a trader wanted to place his funds in the energy sector, he could choose whether he wanted them to go into companies that explore for oil, or perhaps in a set of companies that refine crude oil and turn it into gasoline. Another option would be to send his money into a cross-section of the companies that provide goods and services to the oil industry.

If oil prices are about to rise, it may affect one set of companies more than another, so his interest might be particular. Let’s look over some of the most popular choices among those involved in ETFs trading with iFOREX this year and touch on the appearance, late in 2021, of the very first Bitcoin ETF.

Global Blockchain ETF

This ETF exists so that traders can get exposure to a broad set of the strongest companies involved in blockchain technology, which is a flourishing trend throughout many industries at the moment. In fact, one forecast says that the global blockchain market will spill over beyond $19 billion by 2024. The companies that form part of this portfolio are all over the world, from USA to Germany to China.

This ETF is about more than cryptocurrency: its feelers reach to many sectors and industries. Some of its top holdings are Riot Blockchain Inc., Coinbase, and Marathon Digital. Good news for traders who follow this ETF is that blockchain technology is being improved in terms of security and transparency by government and industry.

Invesco QQQ ETF

Some of the companies tracked by this fund you might have heard of are Apple, Microsoft, Tesla, Nvidia and PayPal. The aim of this popular fund is to track companies that are setting new paths in big future-focussed industries like Cloud Computing, Electric Vehicles, Mobile Payments and Augmented Reality.

The ETF does more than that in also giving traders exposure to major sectors that won’t go away overnight like health care (medical equipment and pharmaceutical companies), industrials (companies that provide machinery and equipment to the energy industry), and consumer staples (retailers and producers of food and household items).

SPDR Gold Shares ETF

Traders who want to be exposed to the gold market through trading in securities knock on the door of this ETF. The Gold market is unique. It’s not all that bound up with other markets like the stock or bond markets or currency markets. Therefore, funds sent toward gold wouldn’t be as vulnerable to the same kinds of risks as those markets.

The factors that determine gold price are also different to those that determine currency values or other share prices. SPDR was listed on the NYSE in 2018 and can rightly claim to be the biggest physically backed gold ETF on the planet. Most demand for gold comes from the jewelry industry but other industries, including the medical industry, need it too.

Down the Road to 2022

A memorable moment for cryptos happened in October when traders interested in ETF Bitcoin exposure saw the birth of the first Bitcoin ETF. Traders felt that this would channel more funds in the direction of the crypto, and as a result its value was sent up to a six-month high of $64,367.14.

The ProShares Bitcoin ETF does not directly place any funds into Bitcoin currency, but rather gives its customers exposure to Bitcoin futures contracts. We may see other crypto ETFs popping up as the months go by.

ETFs trading with iFOREX

At iFOREX, you can trade ETFs as CFDs, which means you’re not buying any of the actual shares in the ETF portfolio, but rather trading on their price movements, whether up or down.

iFOREX is a leading global broker offering hundreds of CFD instruments as well as tutorials on its broker YouTube channel. Before you begin ETFs trading with iFOREX as CFDs, take advantage of the brand’s wide array of useful trading tools, educational materials, and demo account.

Lastly, don’t forget to keep in touch with ETF Bitcoin news and any world news related to your trading instrument so you can always make informed trading decisions. And be sure to follow iFOREX’s broker YouTube channel.

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