Prudential International Funds

Prudential International Funds

Prudential International Funds

ETF's allow the investor to do more than simply trade during the day like stocks. ETFs can also be sold short or traded on margin. They allow investments in several companies in a common sector with a single purchase, like a mini-mutual fund, but prices change continually during the day like stocks instead of being set once a day like mutual funds.

The Benefits of Investing ETFs as Investments

Like common stocks and bonds, ETFs can be traded during regular trading hours. They provide an opportunity for speculative investors to bet on the direction of shorter-term market movements through the trading of a single security. For example, if the S&P 500 has a steep rise in the price of home building stocks through the day, investors can take advantage of it by purchasing a home building ETF, hold it briefly while the price continues to rise and then sell it at a profit before closing.

Since stocks of particular sectors tend to move together, a buyer may not have to spend time researching the best single equity and instead purchase an ETF based on a rising sector. This gives the investor ownership of perhaps several dozen companies that have been picked by experts in that sector.