ETF Trading Cheat Sheet

In an effort to assist traders with narrowing down the right fund for their goals, below we’ve compiled a list of the most popular asset classes along with the related leveraged and inverse pairs (when available) for each one:

• Major Equity Indexes
• Domestic Sectors
• Domestic Industries
• Europe Equity
• Asia Equity
• North & South America Equity
• Bonds
• Commodities
• Volatility & Currency

Please note that for all of the following groups of inverse and leveraged ETFs we have only listed the most liquid option available. For example, assuming there are several 2x leveraged S&P 500 ETFs, we have listed only the most liquid one based on average daily trading volumes.

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This group of funds tracks the most well known broad-based equity indexes in the global stock market, including the S&P 500 Index, which is generally regarded as the “Go-To” barometer for U.S. markets, as well as the EAFE Index, which is the most coveted benchmark for tracking developed markets. This group also includes several “style” ETFs which have garnered a lot of attention in the active trading community, including High Beta, Low Volatility, and Equal Weight.

Those who wish to get a bit more granular with their trading strategy can utilize sector ETFs for their ease-of-use when it comes to establishing timely, tactical exposure to a particular corner of the market. Sector ETFs have opened up the doors to investment strategies that were previously too costly to execute for mainstream investors; for example, self-directed investors can easily employ everything from Sector Rotation to Pairs Trading Strategies, and do so in a cost-effective manner.

Digging deeper, traders can get even more granular with their ETF strategies without sacrificing any diversity in options or liquidity. When it comes to establishing long positions in the various industries out there, ETFs can answer virtually any calling. On the inverse and leveraged fronts, however, the industry ETF group certainly has room for improvement in “filling out” the options available to traders.

Traders aren’t limited to their options for accessing overseas markets thanks to the proliferation of ETFs. When it comes to Europe, there are a plethora of country-specific ETFs, allowing for traders to establish targeted exposure whenever necessary. Aside from the well known funds targeting developed European countries, there is a growing number of instruments focused on emerging Europe as well.

Moving along to the East, country-specific options are also plentiful for those looking to trade opportunities in Asia. Given the lack of many country-specific options from the African continent at the moment, this group also includes ETFs to trade Egypt as well as South Africa.

South American markets have made a big splash in the last few years as investors have embraced opportunities beyond the BRIC, although Brazil still remains the most accessible country via ETFs from the region.

Although equity ETFs dominate the Top 100 List by Trading Volume, there is no shortage of trader-friendly bond funds. Investors can implement everything from a duration-focused strategy to one that targets just one particular segment of the fixed income world.

Commodities trading has been around for decades, but the barriers to entry in the futures market have been enough to keep many on the sidelines. ETFs have opened up the doors to previously difficult, if not altogether impossible, to reach asset classes; traders can now easily and cost-effectively move in and out of instruments offering exposure to everything from gold to natural gas.

The roster of alternative asset classes accessible via the ETF wrapper continues to expand, further democratizing the global investment landscape. Traders can utilize volatility funds to target a previously hard-to-reach asset class reserved for sophisticated investors only. The foreign exchange market is also at the tips of ETF traders’ fingertips; there are a number of country-specific currency ETFs as well as broad options for targeting currencies of developing economies.

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