Some of the best performing exchange-traded funds (ETF) available on the US stock exchanges have gone up by more than 25 per cent in the first three months of the year. While investing in individual stocks still remains the best bet, the ETF’s provide investors with a long-term asset allocation plan. Owning the US stocks via ETFs will give you exposure to various index stocks thus bringing diversification to the portfolio.
For starters, the ETFs listed on US stock exchanges can be a good starting point. An ETF, typically, tracks one specific index and thus investing in it means you end up buying all the stocks of the index in the same proportion as held in the index. What’s more, in an ETF you get the live prices as trading happens all through the market hours and the cost of owning them is considerably low.
Most of the ETFs are benchmarked or linked to the leading stock market indices such as S&P 500, Nasdaq, Russell 1000 and Russell 2000 amongst others. Some ETFs are benchmarked against specific sectors such as Oil and Energy or Real Estate.
ETFs provides easy access in taking exposure into the stock market across various themes. There are ETF’s on various different counts such as :
- By Asset classes – Equity ETF, Asset Allocation ETFs, Commodity ETFs
- By Investment Style – Active Management, Long/Short, Micro-cap, Midcap etc
- By Sector – Aerospace, Artificial Intelligence, Autos, Bank, Basic Materials, Biotechnology etc
Few top-performing ETFs in 2021
If you as an Indian investor want to invest in ETFs, you just have to open an international brokerage account registered in the US. The account opening can be done from the comfort of your home or office in India. And once invested, you can also employ traditional stock trading techniques such as stop orders, limit orders, margin purchases, and short sales using ETFs.
ETF’s are low-cost investments and allow one to take exposure in several stocks of the same index at one time. The best way to way to hold a bouquet of prized US stocks is through an exchange-traded fund (ETF). Invest now before the next bull run comes up in the US stocks.