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ETF Trading with JFD

ETF or Exchange Traded Fund is a portfolio management entity that generates capital from shareholders and invests it in a basket of financial instruments. It usually replicates the structure of an index, an investment region or an industry as closely as possible. For example, an ETF may use as a benchmark the DAX or track the developed countries in Europe or the fintech industry. With over four trillion USD of investment volume worldwide, ETFs have become quite a popular low cost, transparent and tax-efficient investment vehicle. Such funds could be suitable for medium to long-term oriented investors.

ETFs work in much the same way as stocks. A fund manager will design an ETF to track the performance of an asset or group of assets, and then sell shares in that fund to investors. These investors then own a portion of an ETF, but do not have any rights to the underlying assets in the fund. Instead, ETFs track the value of the underlying, and provide investors with near-identical returns.

When an ETF applies a dividend distribution policy, it allocates the gained dividends among its investors (shareholders). On the other hand, a dividend capitalisation policy implies that the fund reinvests the gained dividends increasing its capital (assets under management). If you buy and hold long enough shares in an ETF that distributes dividends, you will receive a portion of them on the dividend payment date.

Yes, depending on the ETF.

JFD offers the commission-free ETFs as physical products in which you can invest your capital owning the purchased asset (shares of the fund’s equity). When trading the CFDs on ETFs, you speculate on the price movements without actually owning the respective assets. Unlike ETF CFDs, the commission-free ETFs have no leverage (100% required margin).

iShares is a group of exchange-traded funds (ETFs) managed by the global investment corporation BlackRock Inc.