Hello Mustachians,
With your kind help I have decided. I am awaiting approval by Keytrade Bank and if all goes well, I'll be investing in these ETFs
https://www.vanguard.nl/portal/site/nl/en/etf#funds_tabTop priority are VUSA and VEUR and maybe also VJPN (as I like the companies in that portfolio). These seem to be the least expensive way to invest my money. I don't want to lose from price spread when buying USD or GBP, and these seem to be the best EUR ETFs (and cheaper than all funds available to me, that I could find).
All is good and well, but... after reading quite a lot, I am still very confused about lots of things regarding ETFs:
1. How many entities are there between me and Vanguard, making money off the price spread? Is there any possibility that this results in my money buying considerably less company stocks than if I would buy them directly?
2. When I give them EUR, how do they convert it to USD (to buy American companies in the case of VUSA) and don't they pay comissions. Don't they have USD price spread? And incredibtly, this fund is still cheaper than VEUR. How's that? What makes VEUR more expensive?
3. Is there risk out of the ETF itself being speculated with? What will happen if my ETF's price tanks just because of speculation (people buying and selling it)? And as a whole, how close is the price to the "intrinsic" value of the ETF shares? I mean, how closely does it correlate with the value of underlying companies' shares? Does this ever fluctuate? A lot?
4. (Quite like my previous question, but in a different aspect) - How does the whole thing work? When I buy ETF shares, do I buy them directly from Vanguard, or is it from some other investor selling their shares? And in general, when the ETF shares raise, does this give Vanguard more money to invest in companies? If not, isn't this a bubble? Can I lose lots of money just because of that?
5. How does Vanguard decide on when to emit new ETF shares? Is this regulated in any way? Is there any space for bad management in this regard?
6. Should I be concerned because of these being new ETFs (just several months into existence)?