Global forex broker, HYCM, announced earlier today that it has just launched exchange-traded funds (ETFs) on its MT5 platform. In addition to forex, stocks, indices, cryptocurrencies, and commodities, the broker will now offer 20 different ETFs including the top 3 traded ETFs: SPDR S&P 500, iShares Russell 2000 Index, and VelocityShares 3x Inverse Crude Oil ETN.
Giles Coghlan, HYCM’s Chief Currency Analyst, commented on why more traders are becoming interested in ETFs:
One of the key benefits of an ETF is that it allows our investors to diversify their portfolios. As ETFs hold a basket of stocks or securities, they are also an ideal way of investing in market sectors. For example, say market conditions are looking good for banks, you could use an ETF to invest in the financial sector as a whole rather than take a chance on an individual bank stock.
It is not hard to see why ETF’s have grown in popularity year on year since their inception in 1993. They are now attracting over US$5 trillion per year. By investing in a sector via an ETF, the ups and downs of individual stocks are reduced, portfolios are diversified, and volatility can be reduced.
ETFs are less volatile than stocks and they also incur lower operating costs and fewer broker commissions than buying each stock individually would. Traders can choose between existing ETFs that focus on a variety of targeted industries knowing that they tend to have a more innovative and faster response to trends.
The new asset class comes with leverages up to 1:20 and different account types to suit all trading styles.
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