An exchange-traded fund (ETF) that tracks other ETFs rather than stocks, bonds or derivatives. ETFs of ETFs track the performance of other ETFs, which may have direct exposure to the underlying securities they track.


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ETFs of ETFs are tools that provide more diversification than regular ETFs. They can be constructed based on certain desirable factors such as risk levels, time horizons or sectors. One of these financial instruments can give an investor broad exposure to many different sectors and regions. Typically, ETFs have a lower expense ratio compared to more managed funds such as mutual funds.

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  1. Can mutual funds invest in IPOs?

    Mutual funds can invest in initial public offerings (IPOS). However, most mutual funds have bylaws that prevent them from ... Read Full Answer >>
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  3. What does a high turnover ratio signify for an investment fund?

    If an investment fund has a high turnover ratio, it indicates it replaces most or all of its holdings over a one-year period. ... Read Full Answer >>
  4. What is the difference between passive and active asset management?

    Asset management utilizes two main investment strategies that can be used to generate returns: active asset management and ... Read Full Answer >>
  5. Is there a situation in which wash trading is legal?

    Wash trading, the intentional practice of manipulating a stock's activity level to deceive other investors, is not a legal ... Read Full Answer >>
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