TFs, or exchange-traded funds, have been created to allow people a more flexible yet comprehensive way to invest in the global financial markets. They are they the ideal investment option for people who wish to invest not in just one company or commodity, but in a whole sector or market trend. Some ETFs even allow shorting the markets, therefore allowing investors to profit from a downward trend.
Listed below are some of the ETFs featured on eToro. Feel free to enter the platform for a more in-depth look:
Powershares QQQ – Tracks the performance of the Nasdaq Index
SPY – Tracks the performance of the S&P500 Index
VXX – Tracks the performance of the VIX Index
SPDR Gold – Tracks the performance of Gold bullions
XLE – Tracks the performance of the US Energy sector
XLF – Tracks the performance of the US Financial sector
XLV – Tracks the performance of the US Health Care sector (Which has bounced back impressively since Donald Trump was elected in office)
Sounds good? Wait, there’s more.
Even if you look at eToro’s ETFs from an objective point of view, the benefits are clear: Low-cost entry fee, diversification across a whole sector, 1 click investment, no commissions and management fees, deposit and withdraw funds without a hassle, and the list goes on.
However, some elements of eToro’s ETFs could be improved to make them more accessible and appealing to professional investors. Elements such as offering a more “exotic” investment theme (like gaming or travel), being privately managed by eToro’s investment committee, and being powered by a state-of-the-art machine learning engine that sifts through billions of data fragments to find the top performing assets and traders on the platform. The assets are then integrated into Market CopyFunds while the traders are integrated into Top Traders CopyFunds.
Take for example the GainersQtr CopyFund. Its portfolio is constructed of active and low-risk investors who have shown positive gains for several quarters. Each trader was selected by the machine learning engine, according to specific and predetermined parameters. The same engine then watches closely the performance of each trader and alerts the Investment Committee if he has stepped outside the CopyFund’s parameters.
The bottom line
While the similarities are there, the technological edge and the hands-on management of CopyFunds take the concept of Exchange Traded Funds to the level on its own.