Question

For the third discussion question of the quarter, we are going to examine a few Exchange-Traded Funds (ETFs) and determine which seems like the best investment for us. Information about ETF performance, industry, expense ratio, dividend yield, and various other elements will be given. Based on the description of the funds provided, I would like for you to discuss which investment was the most appealing to you from the perspective of a potential investor and why you felt that way.  

As it is likely that there will many different companies chosen by different members of the class, please feel free to discuss and debate with your colleagues about areas of agreement and disagreement with your selections for your required follow-up responses.  

	ETF #1	ETF #2	ETF #3	ETF #4	ETF #5
Industry/Sector	Whole Market	Energy	Bonds	Whole Market	Technology
12-month Returns	+ 9.1%	- 4.2%	+ 1.2%	+ 5.5%	+ 19.2%
Expense Ratio	0.10%	0.12%	0.05%	0.50%	1.15%
Dividend Yield	1.1%	3.4%	3.1%	4.1%	0.1%
Leveraged?	No	No	No	No	Yes (3x)
Inverse?	No	No	No	Yes	No
Region	US Domestic	US Domestic	Global	Emerging Nations	Global
Characteristic	Blend	Industry-Specific	Global Bonds	Negative Growth	Global Growth

Answer 1

Details	ETF
	1	2	3	4	5
Industry/Sector	Whole Market	Energy	Bonds	Whole Market	Technology
12 month return	Higher	Negative	Lower	Average	Highest
Expense Ratio	Lower	Lower	Lowest	Average	Higher
Dividend Yield	Lower	Average	Average	Average	Lowest
Leveraged	Nil	Nil	Nil	Nil	higher
Inverse				Yes
Region	Local	Local	Global	Emerging Nations	Global
Characteristic	Mix	Industry specific	Global	Negative	Global
Explanation of All ETF
Investment is decision based on nature and purpose of investor, therefore different people make investment in different options.
Investor may want high returns with option of higher risk or may invest with the purpose of safety first and lower returns.
Therefore all options evaluated as under:-
ETF	Positives		Negatives		Conclusion
1	Providing good return, less expense ratio indicate that in future it can grow rapidly. Local nature and mix characteristics indicate that it is less risky		Lower dividend provider, recent have Limited region for growth.		Good for limited investment
2	Average dividend		Negative return,average return, no expected growth, no foresee expansion		Not good for invesment
3	Constant in return, would be stable in future		Lower return		Investment for those who don’t want to take risk
4	Inverse nature provide opportunity for short term benefits as it is predictable		Average return provider in long term, negative in nature		Good for those who want short term benefits by taking risk
5	Highest growth, leveraged hence have tax benfit , scope of growth exist as having global market		Lower dividend provider		Good Investment for future