Investors following the growth of SuperForex will be pleased to learn that the broker has added a new asset class to its portfolio, namely ETFs. Thus, clients of the company can now trade one of the most reliable types of instruments out there. Here is a little bit more about ETFs and why they are such a favorite among top-notch investors.
What Is an ETF?
The abbreviation ‘ETF’ stands for ‘exchange-traded funds.’ This is a class of securities that are traded on the stock exchange, much like company shares or stock indices. However, ETFs are neither. Instead, they track these other assets commonly found in the financial markets.
Some ETFs follow a single asset. For example, gold and crude oil are assets that have many ETFs tracking them. The SPDR Gold Shares (GLD) is a notable one, but it is far from the only ETF tracking gold out there. The SPY is another popular ETF which follows the S&P 500 stock index.
There are also exchange-traded funds that track multiple assets, or even the whole market. For instance, an ETF such as the XLE (Energy Select Sector SPDR Fund) tracks the entire energy sector, and is not the only one to do so.
What Are the Advantages of Trading ETFs?
Exchange-traded funds are a great way to hedge one’s investments. They generally seem less volatile than other assets. In addition, they are characterized by high liquidity, making them very attractive to traders.
ETFs are also a safer way to invest in a lot of companies or commodities at once. In general, buying or selling ETF shares requires less money than buying into each asset the ETF might track separately. Plus, doing everything in one order instead of multiple ones saves traders commission fees and other expenses.
What ETFs Does SuperForex Offer?
SuperForex is launching its ETF trading service by focusing on the relatively new, but promising cannabis industry. Note that the cannabis plant refers to both hemp and marijuana.
All but six of the United States have legalized or at least decriminalized marijuana, while the non-psychoactive hemp variety of cannabis is widespread in the cosmetics, pharmaceutical, and clothing industries, among others. Hemp is legal around the world, and more countries are opening up to at least the medicinal properties of marijuana as well.
Thus, cannabis farming and other industry-specific businesses have been on the rise in recent years and set to continue in a similar vein. This burgeoning industry is one of the most interesting ones to follow, and an ETF is a great way to invest in it.
SuperForex customers will be able to access cannabis ETFs via any ECN account. The company plans to add ETFs that track different assets in the near future as well.