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All about index funds (ETFs) and their composition

In addition to the wealth of data Moning gives you on traditional stocks, in the ETFs tab you’ll find data specific to Exchange-Traded Funds also sold on the exchange. These are diversified funds that hold multiple assets, though this can be local or global, can often contain a variety of investment types, such as bonds, commodities, and stocks, and can be limited to one sector, or involve a broad range of sectors. Nevertheless, EFTs have their own share price and are available on the exchange just like traditional stocks.

Let’s have a glance at the key data Moning gives you so that you make fast and informed decisions when adding EFTs to our portfolio.

First, you’ll notice that the search filters here are setup a little differently, allowing you to filter out ETFs based on the particular index they trade on, their dividends yield, whether or not there are compliant with UCITS or PEA legislation in the EU. You can filter by their policy dividends payout policy. And by ETF type.

Now let’s click on a particular ETF and drill down a bit further into even more enlightening data Moning provides on Exchange-traded funds. As you’ll see, just like with traditional stocks, you can use these tabs to skip to a particular section, giving you a wealth of analyses and data points to absorb. Of course we see the ETFs current annual yield.

Assets under management, the total market value of all the financial assets with this ETF.

How the dividends are paid out.

A distributing ETF indicates that dividends are paid in cash directly to your securities account. An accumulating ETF indicates that dividends are automatically reintegrated into the value of the ETF by its issuer. It may seem interesting to choose a distributing ETF to receive cash dividends on your securities account, but this can be a false good idea in some cases. In fact, the payment of dividends in cash is generally taxed. Depending on the capital invested, it may be preferable to accumulate automatically for tax reasons and also to limit transaction costs during the probable reinvestment of these dividends.

Moning shows you the ESG score that indicates the long-term environmental, social and governance risks for the companies that make up these investments. What’s the general temperature when it comes to how happy their employees are, executive pay, how management conducts itself, ethics standards, and so on. A general business sustainability score, packaged as a simple letter grade anyone can understand. Bear in mind, of course, that sometimes lower grades don’t indicate problems, but could be a reflection of an entire industry, or other factors. So this score shouldn’t always break or seal the deal. But nevertheless in many cases it can provide a very strong snapshot of the investment at a glance.

You can see here whether or not this ETF is PEA or UCITS-compliant.

You can see here whether this ETF is tratditional or physical, using index securities to track the underlying holdings. Or whether this ETF is synthetic, thereby using swaps and collateral or other derivatives to track the index. For those who know what they’re doing, synthetic ETFs can be very good at tracking with accuracy and with little error, not to mention help investors gain footholds in markets that are otherwise difficult to access. Just bear in mind that by nature, counterparty risk must be factored in.

Here we see how man holdings are in this ETF.

If this ETF is currency-hedged, you can see that here. This generally indicates lower risk, allowing one to lock in the current trading price despite what changes await tomorrow, and guards on against negative fluctuations on the exchange rate.

And we have both type of ETF, and the trading jurisdiction, here.

Now let’s use the tabs, or scroll down even further to have a look at some more detailed information.

We can see a graph of up to the last 10 years of stock prices. And hover over the line to get more specific.

Here in the Performance Comparison section, you’ll see a snapshot of the company’s returns over the last year, and over the last five years according to Standard and Poor’s Depositary Receipts. As well as Standard and Poor’s 500, and the NASDAQ 100.

And Moning shows you a graph of the company’s Dividend history as well. How many years a positive dividend has gone interrupted. And how often its dividends are paid out to stock holders.

Here in the Sectors & Top Holdings section, you’ll see a breakdown of all the various sectors that make up this ETF, according to approximately what ratio. And the same for the specific companies that make up this ETF.

And finally Moning shows you the countries these companies operate in.

And there you go. Moning gives you easy-to-spot, easy-to-understand insights into the health and history of any given ETF, so that you can make confident, well-informed decisions as you add to your portfolio.

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