1. Exchange-Traded Funds: Introduction
  2. Exchange-Traded Funds: Background
  3. Exchange-Traded Funds: Features
  4. Exchange-Traded Funds: SPDR S&P 500 ETF
  5. Exchange-Traded Funds: Active Vs. Passive Investing
  6. Exchange-Traded Funds: Index Funds Vs. ETFs
  7. Exchange-Traded Funds: Equity ETFs
  8. Exchange-Traded Funds: Fixed-Income and Asset-Allocation ETFs
  9. Exchange-Traded Funds: ETF Alternative Investments
  10. Exchange-Traded Funds: ETF Investment Strategies
  11. Exchange-Traded Funds: Conclusion

Although the first exchange-traded funds (ETFs) were designed to track broad market stock indexes, since that time, ETFs have been developed to track industrial sectors, investment styles, fixed income, global investments, commodities and currencies. ETFs are now available to replicate just about any index available. All that is required is that there is enough investor interest to make the ETF profitable.

An ETF trades like a stock on a stock exchange. However, like a mutual fund, the ETF has a structure that pools the assets of its investors and uses professional money managers to invest the money. Unlike most mutual funds, which are actively managed, most ETFs are passively managed. An ETF most resembles an index fund that tracks the same index and its performance should closely mirror the index it tracks.

An investor who wants to buy ETFs has a myriad of options to choose from in equities, foreign stocks, fixed income and alternative investment. There are also many different strategies the investor can employ when using ETFs. Like other investments, it is important for the investor to evaluate the different options to ensure the right ETF is chosen for the job.


Related Articles
  1. Investing

    Exchange-Traded Funds (ETFs)

    This vehicle combines the diversification of a mutual fund with the flexibility of a stock. Learn more about them here.
  2. Investing

    The Advantages of ETFs Compared to Index Funds

    With the ongoing ETF boom, ETFs gain more variety and increased competition in the market leads to further investors' advantages compared to index funds.
  3. Investing

    4 Ways to Evaluate ETFs Before Buying

    Learn four areas in which to evaluate an ETF investment to be sure that the investor has a clear understanding of the security being purchased.
  4. Investing

    The Main Attractions of ETF Investing (SPY)

    As the popularity of ETFs soar, a look at the main benefits of these investment vehicles.
  5. Investing

    Building An All-ETF Portfolio

    Balance is the key when selecting an all-ETF portfolio that will hedge against market volatility.
  6. Investing

    When Is the Right Time to Change From Mutual Funds to ETFs

    Find 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.
Frequently Asked Questions
  1. I'm about to retire. If I pay off my mortgage with after-tax money I have saved, I can save 6.5%. Should I do this?

    Only you and your financial advisor, family, accountant, etc. can answer the "should I?" question because there are many ...
  2. My wife and I both converted our Traditional IRAs to Roth IRAs over a decade ago and have invested the maximum allowed each year since. We're buying our first home soon. Do we both qualify for one-time, tax-free, $10,000 distributions?

    You and your spouse each qualify for a penalty-free distribution of up to $10,000 for the purchase, acquisition or construction ...
  3. Is a Thrift Savings Plan (TSP) a qualified retirement plan?

    Take advantage of the government's retirement plan for employees with the Thrift Savings Plan. As with a 401(k), contributions ...
  4. Who manages the assets in a Roth 401(k) account?

    Learn how to personally manage the assets in your Roth 401(k) plan and determine the best options available to help meet ...
Trading Center