What can you invest in? An overview of different assets
Investing is the buying of assets with the aim of earning a return. There are various types of assets, and each investor needs to make their own choices.
You can choose one or multiple assets to invest in. Everyone wishes to gain, but that hope doesn't necessarily come true. All investments carry a risk of loss. The choice of investment varieties requires a trade-off between returns and risks. Generally speaking, the higher the potential return, the greater the risk.
So, on moomoo, what assets can investors with Futu AU accounts invest in? Currently, stocks and ETFs are the two main types.
Stocks
Stocks are a kind of security. Public companies sell their stocks to investors to raise the funds needed for growth and development. Investors are able to share the profits from companies' growth or market volatility, while they also need to take risks.
Stocks are one of the most common types of investment in the securities market. As of 25 January 2022, there are more than 2,000 companies listed on the ASX with a total market value of A$2.8646 trillion. Many well-known banks, mining companies, large retail businesses, etc. are listed on the ASX.
In addition to Australian stocks, Australian investors can also invest in US stocks, which have larger transaction sizes and higher market liquidity than the Australian ones. At the same time, many world-renowned companies such as Apple, Microsoft, and Google are listed on the US stock market.
ETFs
Exchange-traded funds (ETFs) are potential choices if investors want to invest in the securities market, but don't know how to choose, or don't want to take the risks of picking individual securities.
Most ETFs aim to track the return (before fees and expenses) of the relevant index by investing directly in securities that comprise the index in proportion to the weightings of securities in the index, this is known as 「full replication」. Some ETFs may use a sampling strategy, holding a sub-set or a representative sample of the securities included in the index.
All ETFs are open-ended, which means that The number of units on issue can increase or decrease in response to demand and supply. This helps them trade at or near their net asset value (NAV).
By the end of 2021, over 120 ETFs are traded on the ASX, whose value exceeds A$100 billion.
In addition to ASX-listed ETFs, investors can also participate in ETF investments in the US market. The total net assets of US ETFs amounted to trillions of dollars, tracking more markets, covering more industries, and offering more choices than the Australian market.
The above are the main investment varieties that FUTU AU account users on moomoo can invest in. Before investing, you need to figure out how much effort you are willing to pay and how much risk you may withstand. Once you have determined your investment risk tolerance and objectives, you can consider investing some of your money in one or more assets based on your own situation.
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more
