What are Exchange Traded Funds (ETFs)?

What is an ETF?

An Exchange Traded Fund (ETF)is an investment fund traded on the stock exchange. These tickers represent assets such as stocks, commodities, or bonds to their net asset value, and provide an accurate value throughout the trading day.

ETFs are attractive in that they have stock-like features, making them easy to buy and sell on the stock market. There are some ETFs that are made up of different investments (stocks, bonds and other securities). This diversification balances out the risk.

Some ETFs are particular to technology or pharmaceutical industry. You can use these ETFs as an index to see how well a particular sector of the economy is doing. THe investors who create such ETFs strive to mimic any index fund, such as the S&P 500.

Since the ETFs are not actively managed, they come with a low management fee, which can be beneficial for trading.

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