An ETF is an exchange-traded fund. For simplicity’s sake, you can think of it as a mutual fund that trades like a stock. An ETF is bought and sold on an intraday securities exchange and is composed of a basket of securities. Generally, ETFs will trade at (or very close to) the same price of the net asset value of the underlying assets. Most ETFs are index funds that track indices such as the S&P 500, Russell 1000, or MSCI, just to name a few. In 2008 however the Securities and Exchange Commission began authorizing the creation of actively-managed ETFs.
Library
The ETFdb Library is geared towards new investors and investors who are just getting started with ETFs.
What is an ETF?
An exchange-traded fund is an investment vehicle that trades on an exchange. Like a mutual fund, an ETF is a bundle of securities, but instead of being priced based on net assets at the end of each trading day, ETFs are listed on intraday trading exchanges and can be bought and sold throughout the day. Most ETFs are index funds that passively track a benchmark.
So you’ve decided you want to invest in ETFs due to their many advantages. But now come the questions: Which ETFs should you invest in? How many do you need to invest in to reap the benefits of diversification? How often do I need to buy/sell ETFs? Don’t worry; we’ve got you covered.
