While there is a lot of hype around these investment vehicles, let’s take a closer look at some of the more popular funds to see if they are worth your time. In this article, we will discuss three popular ETFs and three popular crypto funds.
What are ETFs and Crypto funds?
An exchange-traded fund (ETF) is a type of investment fund that holds a basket of assets, such as stocks, bonds, or commodities, and trades on an exchange like a stock. ETFs are similar to mutual funds in that they offer diversification and professional management, but they differ in two key ways: price and structure.
Crypto funds are investment vehicles that hold a portfolio of cryptocurrencies or blockchain-related start-ups and investments to earn a return on investment.
Three popular ETFs and cryptos 2022
Now that we know a little more about ETFs and crypto funds let’s look at three of the more popular options currently available.
Three popular ETFs
The SPDR S&P 500 ETF (SPY) is one of the world’s largest and most popular ETFs. It tracks the S&P 500 Index, which comprises 500 large US companies. The SPY has a low expense ratio of 0.09% and has been around since 1993.
The iShares MSCI Emerging Markets ETF (EEM) is an ETF that invests in emerging markets stocks. The EEM has a low expense ratio of 0.14% and has been around since 2003.
The Vanguard Total Stock Market ETF (VTI) is an ETF that invests in the entire US stock market. The VTI has a low expense ratio of 0.04% and has been around since 2001.
Three popular crypto funds
The Bitcoin Investment Trust (GBTC) is a fund that invests solely in bitcoin. The GBTC is one of the oldest and most popular crypto funds, having been around since 2013. The GBTC has an expense ratio of 2.00%.
The Ethereum Classic Investment Trust (ETCG) is a fund that invests in Ethereum classic, a fork of the Ethereum blockchain. The ETCG was launched in 2017 and had an expense ratio of 1.00%.
The Digital Currency Group (DCG) is a fund that invests in various blockchain and cryptocurrency-related companies. The DCG was launched in 2015 with an expense ratio of 2.50%.
Should you invest in ETFs or Crypto funds?
Now that we’ve taken a look at three popular ETFs and three popular crypto funds, you may be wondering if you should invest in one or the other (or both).
As with any investment, it’s essential to research and consult with a financial advisor to ensure an ETF or crypto fund is right for you. However, here are a few things to consider when making your decision:
- Risk tolerance- ETFs tend to be less risky than crypto funds because they are diversified and invest in established companies. On the other hand, crypto funds tend to be riskier because they invest in a new and volatile asset class.
- Expense ratio- The expense ratio is the annual fee that a fund charges its investors, and ETFs tend to have lower expense ratios than crypto funds.
- Investment goals- ETFs can be used to achieve various investment goals, such as growth or income. On the other hand, crypto funds are typically used to speculate on the price of cryptocurrencies.
The benefits of investing in ETFs and Crypto funds
Now that we’ve looked at some of the things to consider when deciding whether to invest in ETFs or crypto funds let’s take a look at some of the benefits of each.
Benefits of ETFs
- Diversification- ETFs offer investors diversification because they comprise a basket of assets. If one asset falls in value, the other assets in the ETF may offset the loss.
- Trading flexibility- ETFs can be bought and sold throughout the day on stock exchanges, giving investors the ability to respond to changes in the market quickly and easily.
- Low expense ratios- ETFs tend to have low expense ratios, which means that investors save on fees.
Benefits of crypto funds
- Potential for high returns- Crypto funds have the potential to generate high returns, and this is because cryptocurrencies have the potential to increase in value rapidly.
- Access to new and emerging technologies- Crypto funds give investors access to new technologies, such as blockchain.
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