Exchange-Traded Funds (ETFs)
ETFs are investment companies that can be legally classified as either open-end companies or UITs.
- ETFs differ from traditional open-end companies and UITs because, by SEC orders, shares issued by ETFs trade on a secondary market and are only redeemable in very large blocks (for example, blocks of 50,000 shares).
- ETFs are not considered to be, nor are they permitted to call themselves, mutual funds.
The following articles contain useful information about ETFs, from the different varieties to choose from, to their benefits and how they are created:
Some types of companies that might initially appear to be investment companies may actually be excluded under federal law.
Private investment funds, sometimes called hedge funds, have no more than 100 investors or their investors all have a substantial amount of other investment assets. These funds are not considered investment companies, even though they issue securities and are primarily engaged in the business of investing in securities.
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InvestingFind out how to determine when it's the right time for you to switch from mutual funds to ETFs, including the benefits of ETFs and who they are best for.
Financial AdvisorDespite the rise of ETFs, mutual funds are not headed for extinction. Here's why they are here to stay.
Financial AdvisorWhile ETFs and mutual funds are fundamentally different, they also provide many of the same benefits. Here's how to choose between the two.