What are ETFs & how do they work?

Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities.

What is an exchange traded fund (ETF)?

An exchange traded fund, or ETF, is a basket of investments like stocks or bonds. Exchange traded funds let you invest in lots of securities all at once, and ETFs often have lower fees than other types of funds. ETFs are traded more easily too. But like any financial product, ETFs aren’t a one-size-fits-all solution.

What are the different types of ETFs?

ETFs are sometimes focused around certain sectors or themes. For example, SPY is one of the ETFs that tracks the S&P 500, and there are fun ones like HACK for a cyber-security fund and FONE for an ETF focused on smartphones. Here are a few of the key differences between ETFs, mutual funds and stocks.

What are exchange-traded notes & ETFs?

Exchange-traded notes are debt instruments that are not exchange-traded funds. ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the day on stock exchanges, whereas mutual funds are bought and sold from the issuer based on their price at day's end.