Exchange-traded funds are securities that monitor particular assets and they work in a way that seems to mimic the mutual variety. Both funds watch the path of the group of shares in virtually the same way. However, that is where the similarities end, as you can’t trade a mutual version of it on a platform.

 

On this front, ETFs have mutual funds beat, as they will be able to hunt down assets at all levels, be they singular or vast. This is something that is only based on the structure with which they are built.

So let’s check a guide on how to get live ETF data in real-time streaming within milliseconds, and see what ETFs and global real-time data feeds are.

Contents:

- How Do the Funds Work

- Types of ETFs

- Passive ETFs

- Stock Funds

- Sector Funds

- Commodity Funds

- ETFs: Upside and Downside

- The Impact of Real-time Data

- Final Thoughts

 

How Do the Funds Work

The striking similarities between ETFs and regular stocks are uncanny. The similarity of the greatest interest is the fact that both can be traded on the stock exchange. This fact bleeds into the way in which both have prices that see-saw, something that is affected by market activity. The opposite is true for mutual ones, which are much less flexible, and only open once a day.

 

These funds can hold many latent assets, which is perfect if you are looking to expand your portfolio. Thousands of ventures can be contained by one as it does not discriminate. All stock across multiple businesses and in multiple industries can be found within them, although ones that are part of a single industry are common. An ETF is a security that has a price that is easy to buy and sold at all times for the whole day, all while being able to sell short.

 

Types of ETFs

For upcoming investors, multiple versions of these funds exist on the market. Each of them covers certain ground that others cannot, because of their unique attributes. These can be used in a multitude of fashions, ranging from hedging to speculation. The following are just a few of the commonly found ETFs:

 

Passive ETFs 

These are actually two types, but they are so linked that they often fall under one banner. Passive versions, for example, can be characterized by their need to mimic the way the general indices are functioning. This is something that works for both complex and singular indices. The Active version, which is the other type, is essentially the complete opposite.

 

Stock Funds

These are formed by a cluster of shares that are used to oversee a particular sector or industry. They are basically built in order to provide a wider view of a specific industry with both established and rising enterprises.

 

Sector Funds

Also known as Industry versions, their main purpose is to pay attention to one industry. This will, however, include multiple companies working in that sector. Their upside comes from the way in which they highlight the best in their respective industry by monitoring them closely.

 

Commodity Funds

These are built for investments in tangible goods such as oil and precious metals. Apart from being a way to diversify a portfolio, their main benefit lies within hedging.

 

ETFs: Upside and Downside

As you can imagine, with every reason to use this security, there is another to refuse it. Because they are generally cheaper than other funds, it is easy to look at them as an easy way out. However, caution must always be taken in business, which means that certain things need to be taken into account. The following are some of the positive aspects of ETFs:

- They can watch over and interact with shares in multiple industries

- They are fairly inexpensive due to a limited number of broker commissions

- They utilize diversification as a means of risk management

- They are numerous versions of these funds and that variety can target either one or multiple sectors

 

Unfortunately, the major qualities that come with these funds are countered with some bad ones. The following are a few negative sides:

- Some ETFs are priced on the high end if they target only specific industries

- They can limit growth and can negatively impact the diversifying of a portfolio

- There is often a lack of liquidity

The Impact of Real-time Data

As with all things of the digital age, the modern stock market is essentially built around the pursuit of knowledge. All knowledge has to come as processed and vetted ready-made data that can be seamlessly read through.

 

As such, possessing a data feed is beyond valuable since global markets are like freight trains moving at full speed, each of them refusing entry to late passengers. This is the reason for the development of data feeds which are the messengers that will help dispel the middleman. You can also get real-time data and provide special services and solutions, by boosting, for example, your future application with the Finage WebSocket and API to show the real-time data.

 

Final Thoughts

It’s safe to say the number of stock market-related tools that are available to the public. ETFs are just some of the many tools that constantly pop up as a way to get into trading, with many on the way. Every tool has its own unique quirks, but every version is in need of one thing which is the presence of data feeds.

 

Having accurate data in real-time is invaluable when it comes to trading in general or when creating a trading app that shows real-time data feed. It should be accurate and fast information for your users because one missed moment can cause some severe damage. At best it could result in a missed opportunity and at worst a terrible loss. So you have to be sure that you provide the best solutions for your clients and work with a reliable service.

Note: The data types (stocks, indices, mutual funds, ETFs) are not provided directly or indirectly from any exchanges but rather over the counter, peer-to-peer, and market makers.

You can get your Real-Time and Historical ETFs Data with a Finage free ETF Data API key.

Build with us today!

Start Free Trial