Submitted by nsscadmin on
An ETF is an investment fund that is traded on a stock exchange. An ETF holds a mix of assets that can include stocks, bonds, commodities which track a specific index, or, it may specialize in a specific industrial sector.
Upon first review an ETF may sound like a mutual fund. However, an ETF, unlike a mutual fund, is traded like a common stock on an exchange. An ETF experiences price changes throughout the day and can be bought and sold at any time at its current price. A mutual fund can only be bought or sold at its closing price at the end of the day.
ETFs also typically have lower fees than mutual funds because they trace an index and do not require the same close daily management that a mutual fund does. ETF still do have fees and risk, which should be reviewed thoroughly before purchase.
