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. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>

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