etf's exchange traded funds have been one area of the market that have really boomed
in the last 10 15 years and here you can see a selection of some of the etfs uh you can trade
on our platform so in this video i'll take a look at these in more detail and pick up on
four that could be of interest whether you are a trader or an investor we have looked at some etfs
before but i thought let's do a video explaining how it works and look at maybe some of the more
interesting ones at the moment here's uh here's an example of one uh the gold etf spider gold shares
that that aim to track the performance of gold of course we saw highs hit all-time highs hit in the
summer last year for gold and since then the price has been selling off we have seen a bit of support
recently and all the etf is doing is mimicking what's going on so how do they actually work
which ones are interesting at the moment let me talk about them a bit more then come back and look
at them in a bit more detail hello i'm david jones from capital.com and i thought um we do a slightly
different video again where we look at a really popular investment vehicle the etf the exchange
traded fund so as usual in this video i'll talk about four uh different etfs popular and not so
popular then we'll jump on the platform backwards and forwards take a look at them in more detail
and see if there are any opportunities as usual if you're watching this and you haven't subscribed if
you could click on subscribe it does help support the channel means we can continue to push out lots
of content and of course we do uh the regular live streams on a friday afternoon now if you're
subscribed with the alarm bell notification pushed uh you get a notification off youtube just as
we're about to go live um anyway let's get into it and let's start things off by looking at probably
the most popular etf first of all before we get into this let's just talk about what etfs are in
case you're not sure so as i say it's uh stands for exchange traded fund in the last what 15 to
20 years it's turned out to be one of the uh most fastest growing sections of investment management
so what does it do it's pretty simple what etfs do they track a market so they might track an index
like the s p 500 or they might try crack a sector of the stock market like the gold miners index
or they might track a commodity like the price of silver or they might track something
entirely different that's listed on an exchange so it's a way of gaining exposure to uh the area
of the market the etf is covering and of course by doing it through an etf by gaining exposure you're
not just buying one stock for example let's say you're trading the gold miners index or investing
in a gold mining etf you're gaining exposure if you're talking about stocks to a basket of stocks
so you're spreading the risk so that's one reason i think particularly when it comes to sectors that
etfs appeal as it's tracking the underlying market whatever it is the price of gold the price of the
s p then um the price of the etf uh will fluctuate the same way a share price will move throughout
the trading day as the underlying market the etf is tracking is moving around one of the appeals
of etfs is at other fees typically exchange traded funds have lower annual management management fees
than other investment vehicles other investment funds so again it's a fairly transparent low-cost
way of getting passive exposure to an area of the market and if you look at the growth at the end of
2020 there was something like 7.7 trillion dollars invested uh in etfs why the clock back 10 years
2010 that number was more like 1.3 trillion so again massive growth over the last decade and
it's growth um that is continuing so let's talk about probably one of the most well-known uh
etfs the the one that tracks the s p the so-called s p 500 spyder uh the the three digit code is s p
y and it's it's very simple what it sets out to do it attempts to uh replicate uh the performance
up or down plus the yield any dividends that you'd see within the s p 500 index so clearly this is an
exchange traded fund that gives you exposure to and tracks a basket of the large u.s capitalized
stocks that trade on an exchange that's what the s p 500 is not surprisingly it's a really popular
etf the s p 500 is a fairly um broad-based index it's perhaps got more diversity in there than
the likes of the dao or the ftse and the spyder is the oldest listed u.s exchange traded fund
let's take a look at how it trades and what its performance has been
so here's the spy the the s p 500 etf as it says down here the spider portfolio s p 500 growth etf
uh providing investment results that before fees and expenses correspond generally to the
total return performance of the s p 500 growth index not surprisingly it's a really popular one
at the time of recording it's followed the market higher which is what it's meant to do you know
we've seen the s p push out to uh fresh all-time highs again this month so all this is doing is an
alternative way if you wanted to of either trading the s p of course you can trade the s p
500 index on our platform but a way for investors uh to have an instant exposure to that basket
of stocks that make up the s p 500 index so a very uh popular what they call passive way of investing
where you're just going to be tracking the index not trying to look to do anything
outside of that and as we can see with the movements here just tracking that performance
of the s p 500 as well as um broader index etfs that track the likes of um the s p or the nasdaq
they're a sector etf so i thought well let's pick on one that that does tend to get a lot of press
the arc innovation etf the code is ar kk so this is an etf that invests in individual companies
and it's designed the company says to invest in what it calls disruptive innovation so investing
in businesses that have products or services with technology that does have the potential
to change the world so not surprisingly it's a fairly volatile uh etf one of its big holdings is
tesla so again it is very um sensitive to swings in the tech sector so including tesla uh within
its top ten of holdings we also have the likes of zoom uh clearly the video conferencing business
done really well over the last 12 months during lockdown and spotify uh the the music streaming
business is in there as well as clearly a fairly disruptive business when that first started a
great performance over the last 12 months if you invested back in april of 2020 uh the stock
uh of the etf is up by about 150 percent but like i say it is volatile if we look at the last couple
of months the arc innovation etf is down about 20 so you've got to be prepared to ride out uh some
of these volatile swings but again let's jump on the platform and take a look at it in more detail
so if i put arc into the search box you can see we've got we've got a few uh of the arc etfs
in here so what we want to have a look at is the innovation etf let's bring it up
so here's the key a couple of words at the end the funds investment theme of disruptive innovation
you may notice some similarity with the tesla price chart as i said you know tesla is one is
their largest holding you know and we have seen the tesla share price taker
something of a hit over the last couple of months or so so we have seen
the arc etf knocked back from just shy of 160 dollars a share traded down briefly below 110
but it could be an interesting one down at these levels we had that great trend from the march lows
last year clearly in many markets have recovered particularly equities since that that sharp march
sell-off and i think the question now i think for this etf is has it actually fallen out of
the trend it's broken the trend line are we seeing a change in trend for this arc etf i think perhaps
the aggressive trade here would be to be a buyer and take the view if we look what happened in
early march holds around about 105 106 comes back to about 108 50 end of march so if you thought
that actually the sell-off was over i think it's an interesting one down at these levels
being a buyer at 122 or thereabouts with stops the other side of these lows perhaps down at
100 somewhere like that but but this is always a really interesting one to watch um the the
founder of arc kathy wood is very open about her uh investment strategy and fairly regular tweeter
also they put lots of information uh on their website about what they're up to so arc is always
a very interesting one to watch a way to getting exposure to what can often be a volatile section
and clearly we've seen that over the last couple of months but but for me i'd be watching to see if
those recent lows hold and if we see it perhaps try and stage some sort of recovery from here
i thought it'd be interesting to look at a bond etf considering what's going on uh in the markets
with concerns about inflation so let's take a look at the ishares 20-year u.s treasury bond etf
so it does what it says on the tin it tracks the performance of t-bonds treasury bonds with
at least 20 years left to maturity and this is interesting because we have seen some volatility
in the bond market recently as markets get perhaps more concerned about inflation towards the end
of the year we have seen you know perhaps uh a turning point reached for bonds it's still early
days but i thought this would be an interesting etf to flag up it's not had a good 12 months
you know over the last 12 months it's tracked the bond market lower so this etf is down by about 17
which is a pretty poor performance obviously when we look at what other markets like stocks
are doing moving opposite to bonds but again i think the question is will we see inflation
change the fortune of bonds and feed through to this etf let's take a look at some of the recent
moves and perhaps some of the big levels to watch in the in the ishares bond etf here's the ishares
the 20-year treasury bond etf and here we have it down here uh generally the fund seeks to
correspond generally to the price and yield performance of the long-term sector of the
u.s treasury market as defined by the barclays capital 20-plus year treasury index and what's
interesting here is the moves we've seen over the last 12 months loads of volatility in march last
year with investors looking for a safe haven as the coronavirus pandemic spread we saw bonds jump
lots of volatility then since then you know as investors have embraced risk again you know we've
seen the bond market fall away but i think what's interesting is where we are now with uh investors
starting to get a bit more concerned about inflation perhaps thinking that the us central
bank should be more worried about inflation um are we seeing um the potential for a reversal
in the bond market these lows uh from back at the end of 2019 ended up being important for
bonds uh we saw the bond market turn around from a correction then start to rally before exploding
of course in the short term so i do wonder if down at these levels will we see a change of
fortunes for bonds will the sort of yeah the 132 level be a line in the sand so i think this uh
this this etf is a really interesting one to watch for the rest of the year particularly if you think
that inflation is going to be more of a concern and actually the bond market is overdue return
you of course have um etfs for commodities so i thought let's let's take a look at the uh the
spider gold uh etf that not surprisingly tracks the price of gold in financial markets so yet
again it's looking to mimic the performance up or down of the price of gold how it's
trading in the spot in the cash market as with other etfs you know one of the appeals here is
is the ease of trading it you know you can buy or sell it as the market's open it's it's an easy way
of gaining exposure to gold you know some would say it's easier than buying physical gold
storing it and uh potentially ensuring it you're trading this etf rather than getting involved in
the physical metal but as we know from other videos that we've done over the years there's
still quite a split between people who are quite happy to buy and sell so-called paper gold through
an etf and others who adamantly want to hold the physical gold or silver there is not surprisingly
an etf that tracks the price of silver as well so with this etf you can't convert it
into physical gold but let's take a look at its performance and see if there are any opportunities
i know that goals are always a popular market uh on the channel we always get lots of views
of our goal videos and what we what we normally look at of course is uh the spot price of gold in
financial markets um here we're looking at the the gld uh the spyder gold shares um although
the price is different it's tracking clearly the overall movements uh in the price of gold
the sell-off in march of last year the recovery and the acceleration in the summer and off those
all-time highs we still have this correction going on like i said in the the goal video earlier this
week we've seen a short-term base in the etf this has formed ahead of 1.56 but i don't think there's
too much to get excited about at the moment uh for a recovery in gold but if the sentiment towards
gold uh does change and we see it finally break out this correction then longer term
gold bulls you know may want to look at something like the spider gold shares etf as one way of
gaining exposure to the yellow metal that's it for our introduction into etfs uh how they work there
really are so many out there that chances are if you want exposure to a market there's an etf
that covers it but for now from me david jones and capital.com we'll leave things there good
luck with your trading for more trading videos just like this please subscribe to our channel