It is believed that ETFs are the friendliest tool for beginners and lazy investors who are betting on a long-term strategy. Why so and how to choose a reliable broker in these conditions? Told
ETF stands for Exchange Traded Funds — a fund that is traded on an exchange. It is also called an index fund. What is he like? Let’s take a look at an illustrative example.
Imagine that you come to the market and choose vegetables (bonds, stocks). I want to take everything and more. And even the most adventurous walkers will have an appetite in the process. As a result, you come out with huge packages of vegetables — impressive in size … and for the price. Not everyone can do it.
Or you can go the other way — when the seller puts together different vegetables, cuts them into a salad and sells one portion at a time. So everyone gets a ready-made balanced set for a reasonable price.
The ETF is the very «portion» of the market. For example, when buying a fund of Russian companies
These are the main advantages of funds over other assets.
By buying one ETF share, you are acquiring pieces of stock in dozens of companies. This allows you to close all industries and all countries in your portfolio, as well as capture all types of assets — stocks, bonds, gold.
You know the composition of the fund even before the purchase, this is open information.
Funds are more profitable than individual stocks. Thanks to the split — splitting ETF shares into smaller parts — you can literally buy them «for change». For example, one share of a global market fund
No need to dig into analytics and financial reports, and after the purchase, follow the news of the stock market. ETFs are an ideal tool for a long-term passive strategy, because they are easy enough to buy.
Funds are managed by investment companies. For example, FinEx ETF is one of the largest ETF providers in Russia. Its funds are traded on the Moscow Exchange. You can buy them through a broker.
A broker is an intermediary between you and the market who, on your instructions, buys securities on the exchange. Sometimes the bank has the functions of a broker, which is very convenient.
You pay a commission for the services of a broker:
Since ETFs work well in a long-term buy-and-hold strategy, choosing a broker must be approached responsibly. This is the organization with which you must develop a relationship of trust. Here are the main criteria to consider:
License of the Central Bank for brokerage activities.
Pay attention to the size of the commission for transactions. So, MKB, for example, has no commission at all when buying and selling ETFs from FinEx.
Another important criterion is the minimum amount of capital. Sometimes favorable rates are available only to investors with a certain amount on the account. And sometimes you can open an account only from a certain amount, there are few of them, but they are. At the same time, some FinEx ETFs can be purchased within 100 ₽, which is very important for beginners.
Conditions for depositing and withdrawing funds.
Convenient mobile application.
Method of opening an account.
It is also important that the broker has the opportunity to
Reviews and your personal loyalty.
The opinion of the column authors may not coincide with the opinion of the FinEx editorial staff. The decision on the use of securities and any other financial instruments is made by the user independently. The information in the text does not constitute an individual investment recommendation.