Yes. An exchange-traded fund (ETF) is a type of security that tracks a basket of assets or an index (such as an index fund), but trades like a stock.

Just like any open-end mutual fund, an ETF falls under the supervision and control of the Securities & Exchange Commission (SEC). A fund company must get the SEC's approval for incorporating and registering an ETF. Mirroring the structure of a regular mutual fund, an ETF has a board of directors, officers, and an investment advisor and uses third-party providers to handle organizational functions such as accounting, legal, tax and custodial services.

In addition, an ETF uses the same type of fund documentation – prospectus, statement of additional information, and annual, semi-annual or quarterly reports – for shareholders. A review of these documents will clearly show that an exchange-traded fund and an open-end mutual are not exactly the equivalent of identical twins but would most certainly qualify as the fraternal variety.

Details concerning an ETF's board of directors – composition, credentials, compensation and fund ownership positions – can be found in the fund's statement of additional information (SAI).

To learn more, see Introduction To Exchange-Traded Funds.

This question was answered by Richard Loth.

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