Examples of sector-specific ETFs

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With these funds, only companies that make their turnover predominantly with a specific product become part of the portfolio. For example, gaming, semiconductors, hydrogen, cannabis and other segments of the economy can be the focus.

Those who want to invest money in such an ETF want to take advantage of the entire sector growth. This is less riskier than trading CFD in exness verification. Especially in booming segments such as hydrogen or AI, one sometimes does not know which individual company will prevail in the end. Just as little could one say 20 years ago whether Yahoo or Google, Apple or Nokia, Amazon or eBay would become the mighty blue chip stock.

Blue chip shares

Blue chips are usually defined as shares with a particularly high market capitalisation and a great reputation in the industry. Growth rates are somewhat lower here, but share prices are stable. Blue chips or large caps can be used as the basis for an optimal portfolio.

In this respect, it is worthwhile to diversify a little here as well and not to put all your money on one card. An ETF does the work of diversification for you and you can buy the most important securities of a sector index or of a part of the MSCI World in one package comparatively cheaply.

Among the better-known ETFs in this area are the VanEck funds. The fund managers issue the ESPO Video Gaming and eSports ETF, for example, in which only big names from the gaming industry are represented. The SMH Semiconductor ETF, on the other hand, concentrates on the semiconductor industry, which is so important today, while the HDRO ETF aims to turn successes in the hydrogen economy into cash.

Other companies also offer such specialised funds. For example, buying the Invesco Solar ETF brings you a package with all the internationally important companies in the solar industry. The XBI SPDR S/P Biotech ETF, on the other hand, collects strong cash investments from biochemistry and biotechnology, from Biontech to Moderna to AstraZeneca.

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ETFs that relate to the DAX share index

If you are more familiar with the economy and want to invest money safely in this country, look for a fund that is based on the DAX. Such ETFs track the strongest index in by market capitalisation and free float. The DAX index lists the 40 companies traded on the stock exchange that currently have the best value. Since they are weighted according to market capitalisation, they are mostly blue chips.

Market capitalisation

Market capitalisation is the total value traded by a company on the stock exchange. To calculate it, multiply the current share price by the number of shares.

What ratios should you look at for funds?

When you go to the ETF provider's site or look at the financial instrument at the broker of your choice, you should pay attention to certain figures and characteristics. First of all, there is the pure volume of the fund. This varies, as the shares included are exchanged. A value of 100 million euros to one billion euros and more is common here - depending on the investments in which the ETF invests.

You should also look at the number of positions and their specific description. This will tell you how lucrative the index fund is and how serious it is about including the proposed values in the portfolio. Finally, it is of course important to look at the total number of outstanding shares in order to arrive at the net asset value NAV. In the case of an ETF, this describes how much of the assets are attributable to a single share in the fund.