ETFs are exchange traded funds. Very few Forex / CFD brokerages offer them for trading, but a few do. If you see a broker that has ETFs on their books, you know that this is a broker which takes diversification, or to be more accurate offering their clients a chance to achieve wide diversification, very seriously.
ETFs are then just funds which invest in a particular type of asset. Their price then fluctuates with the market value in the underlying assets. Why not just buy or sell the underlying asset itself? Often it is not easy to do that, and ETFs can offer clients, especially retail clients, the chance to get exposure to assets which are not easy to access. For example, you might want to make a trade on the value of commercial real estate, but you are hardly going to buy an office block in downtown New York. However, you might be able to buy a few relatively cheap shares in an ETF which owns a portfolio of commercial real estate in New York, so you could get the same potential benefit on a retail budget.
The most common ETFs you will see offered at retail Forex / CFD brokerages will be owning types of shares, and either residential or commercial real estate. ETFs of shares usually focus on a particular type of company at a greater level of detail than a share index will typically offer. ETFs can offer a much better, stronger level of portfolio diversification at a relatively cheap cost, too.
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