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ETFs
Exchange Traded Fund (ETF)
ETFs may allow clients to diversify their portfolios and take advantage of short-term fluctuations in the market. Easily enter ETF trades in Trader Workstation (TWS) the same way as you enter stock trades. Learn about ETFs
ETFs offer the following features:
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- ETFs allow you to invest in a wide range of equity and bond indices on 16 exchanges in seven countries, including short ETFs and leveraged ETFs.
- Greater liquidity through hands-on trading like a stock.
- Use TWS’s premier technology, including its multi-product spreadsheet interface, real-time streaming quotes, wide variety of order types and specialized trading and analysis tools, and SmartRoutingSM, which searches for the best price available at the time of your trade.
- Use our Mutual Fund Replicator to create ETFs that are similar to your favorite mutual funds!
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- Options trading is available.
- Short selling is available.
- Lower expense ratios and greater tax efficiency.
- Greater financial transparency through daily reporting of the ETF’s holdings.
- Take advantage of market declines by investing in short ETFs.
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Place Trade clients have the ultimate flexibility when it comes to investing! In addition to ETFs, clients have access to thousands of mutual funds to meet all of their investment needs.
Trade ETFs online through your Login to Place Trader Workstation (TWS) or work with your experienced full-service advisor to develop a diversified financial plan that may incorporate exchange-traded funds or traditional mutual funds into your investment portfolio. Learn more about state of the art trading platforms including Place Trader Workstation (TWS).
ETF Commissions and "Commission Free" ETFs
ETF Commissions are the same as our regular stock commissions. We do offer "commission free" ETFs as well however we believe that it is more important to find the appropriate ETF that is right for you than to simply look at the free commission status. Because we offer extremely low commission rates as well as verified best execution to our clients we believe that we are able to pass the very best overall lowest trading cost on to you.
Please keep in mind that whenever you hear "free" (at any company) it does not always mean that the best price is being passed on to you. We know that there is no such thing as a free lunch and we do not take rebates, soft dollars or any other type of payment in exchange for passing along "free trades." (We literally do not receive any compensation for offering these free ETFs but most firms do so please research the investments on their merits and do not get distracted by the free sign.)
Special Notes:
*Investors should take special caution when using short and leveraged ETFs over and above understanding the risks of traditional ETFs. ETFs may involve substantially more risk than may be realized. ETFs and Traditional Mutual Funds are not the same types of investment. Please take time to learn and understand what you are investing in prior to making investment decisions. Review the prospectus or summary prospectus prior to investing.
View FINRA’s Investor Alert for more information on Leveraged and Inverse ETFs.
View FINRA’s Investor Alert on ETNs: Exchange-Traded Notes—Avoid Unpleasant Surprises
View FINRA’s Article: Know Before You Invest: Volatility-Linked Exchange-Traded Products
Margin Requirements - Leveraged ETFs
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To learn more please call 1-800-50-PLACE or 1-919-719-7200 to speak with an experienced ETF specialist today!
Trading Costs ~ Compare and Save Invest in Mutual Funds Contact a full-service advisor
How do inverse ETF's work?
What is a leveraged inverse ETF?
Are ETFs a type of mutual fund? No
What is an ETF? What are ETFs? Definition Meaning
What is an Exchange Traded Fund (ETF)?
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ETFs are a type of SEC-registered exchange-traded investment product that is either an open-end investment company (generally known as “funds”) or a unit investment trust.
ETFs offer investors a way to pool their money in a fund that makes investments in stocks, bonds, or other assets in return for an interest in that investment pool. ETFs are traded on a national stock exchange, throughout trading hours and at market prices that may trade above or below the actual net asset value (“NAV”) of the shares.
Learn More about ETFs at https://www.investor.gov/introduction-investing/basics/investment-products/exchange-traded-funds-etfs
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Types of ETFs (Exchange Traded Funds)
Index-Based ETFs
Index-based ETFs aim to track a specific securities index and will generally invest primarily in the specific securities which make up that index. While there are a number of different alternatives to choose from, the SPDR, or “spider” is an example* of an ETF that seeks to track the S&P 500 stock index and invests in most or all of the equity securities that are included in the S&P 500 stock index. (Most ETFs trading in the marketplace are index-based ETFs.and are not actively managed.) *Please note that this is not an investment recommendation and that you should speak with your own investment advisor prior to making any investment decisions.
Actively Managed ETFs
Actively managed ETFs seek to achieve a stated investment objective by investing in a portfolio of stocks, bonds, and other assets. Actively managed ETF managers may buy or sell securities in the portfolio on a daily basis with no regard to conform with an index.
Many ETFs are typically registered investment companies made up of shares that represent an interest in a portfolio of securities that track an underlying benchmark or index.
ETFs that invest in commodities, currencies, or commodity-based or currency-based instruments are not registered as investment companies.
A major difference between traditional mutual funds and shares of ETFs is that ETFs usually trade throughout the trading day on a securities exchange at prices established by the market (where mutual funds typically do not). Click here to learn more about the differences between Mutual Funds and ETFs.
As with any form of investment, investors should evaluate each investment closely before trading in ETFs and never assume all ETFs are alike. In fact, ETFs can vary widely by anything from asset classes to how they are priced.
Leveraged and inverse ETFs are significantly different from traditional ETFs and typically offer exposure to significantly more risk including intentionally taking on the volatility trade. Further, not all securities that are commonly thought of as ETFs, are actually ETFs. Some are ETFs while others are ETNs and ETPs. It is extremely important to understand the difference and how the securities, that you own, work.
Thinking about trading ETFs, ETPs or ETNs?
You can risk major losses if you trade volatility-related products without fully understanding how they work. Please do your homework before you invest!!!
Is an ETF a registered investment company?
No, not all ETFs are considered to be registered investment companies.
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