How to Evaluate ETFs? Handy Tools Can Help you

ETFs are being chosen by some investors for their diverse asset options, potential risk reduction through asset diversification, and easy trading. But with so many choices, how do you evaluate them?

Open moomoo and go to Markets > ETFs, where you can effortlessly explore ETFs from the U.S., Hong Kong, and other markets. Even if you're new to a market or industry, our useful tools help you quickly find ETFs that align with your needs, based on four dimensions.

1：Choosing based on mainstream indices, sectors, and leverage

1. Index ETF Section: Here, you can find ETFs for major stock indices in the market. Index ETFs, also known as market index ETFs, are generally relatively low cost and easy to understand investment tools which could be appropriate for long and short term investors. If you want to quickly find an index ETF, visit this section and use the filter to locate ETFs that meet your criteria based on the underlying index and leverage.

2. Heat Map feature: This tool categorizes ETFs into three dimensions—Asset Class, Sector, and Region. The heat map visually displays the overall performance of different ETF types, with color intensity indicating performance strength. By clicking on a sector module, you can view a detailed list of ETFs within that sector.

3. Additionally, there are sections for leveraged and inverse ETFs. Here, you can view data such as price, percentage change, and trading volume. Use the filtering options to quickly find ETFs in these categories.

2：Referencing trending ETFs

1. Thematic ETF feature: This tool categorizes ETFs based on current popular themes or industries, such as Japan Stock ETFs, Gold ETFs, and more.

2. Featured Lists: Check out lists of the most active ETFs and those with the strongest percentage changes to stay on top of market trends and identify potential opportunities or risks.

Additionally, these lists can quickly help you gauge the current market sentiment for the overall market and various sectors.

3：Your investment style matters

ETF Style Box: This feature categorizes equity and fixed income ETFs into nine types using a 3x3 grid format.

For equity ETFs, the styles are combined based on market capitalization and investment style, providing a clear visual representation of investment characteristics.

For example, if you are a more aggressive investor or looking to allocate small- or mid-cap stocks in your portfolio, you might consider exploring '"Medium Growth" or "Small Growth" ETFs to find ones that meet your needs. Conversely, if you prefer more stable returns and have a lower risk tolerance, you might look at "Large Value" ETFs or high-credit fixed income ETFs.

The chart that showcases price trends helps you quickly identify which type of ETF is performing best in the market environment of the day.

4：Referencing ratings from professional agencies

Morningstar Ratings: Morningstar ratings are an established firm in the industry for fund evaluation. These ratings can be used as a reference to help make more informed investment choices.

After selecting an ETF, tap on it > Fund.

Here, you can explore detailed information about the ETF, including:

• Morningstar rating and overall performance score

• Holdings details

• Asset types, sectors, regions, and investment styles

This comprehensive data will help you evaluate your ETF portfolio.

To choose ETFs, you should understand their strategies and components, and align them with your investment goals and risk tolerance. Utilize tools on moomoo to gain insights into ETF products, market trends, and potential opportunities.

Before investing in an ETF, you should read both its summary prospectus and its full prospectus, which provide detailed information on the ETF's investment objective, principal investment strategies, risks, costs, and historical performance (if any). You can find prospectuses on the websites of the financial firms that sponsor a particular ETF, as well as through your broker. A Word About Risk: Investment returns will fluctuate and are subject to market volatility, so that an investor's shares, when redeemed or sold, may be worth more or less than their original cost. ETFs are subject to market volatility and the risks of their underlying securities, which may include the risks associated with investing in smaller companies, international securities, commodities, fixed income, and more. An ETF may trade at a premium or discount to its net asset value (NAV).

Leveraged and inverse exchange traded products are not designed for buy and hold investors or investors who do not intend to manage their investment on a daily basis. The use of leverage by an ETF increases the risk and are not suitable for all investors and should be utilized only by sophisticated investors who understand leverage risk, consequences of seeking daily leveraged or daily inverse leveraged investment results, and intend to actively monitor and manage their investment.