- An ETF tracks multiple stocks or securities.
- Can be used to track an index (eg, S&P 500).
- They may track different industries, sectors, or types of companies.
- ETFs carry the risk of the underlying securities being held.
ETFs vs Mutual Funds
- Both give investors a mechanism to diversify.
- ETFs can be traded at any time of day, while Mutual Funds can be traded once a day.
- ETFs are cheaper as mutual funds are managed by fund managers (require a fee?).
Common ETFs
- S&P 500
- DOW
- NASDAQ