1. Exchange-Traded Funds: Introduction
  2. Exchange-Traded Funds: Background
  3. Exchange-Traded Funds: Features
  4. Exchange-Traded Funds: Biggest ETFs and ETF Providers
  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: Best Practices for Trading ETFs
  12. Exchange-Traded Funds: Conclusion

Exchange-traded funds (ETFs) have registered phenomenal growth since the introduction in 1993 of the first ETF. Nearly a quarter-century later, ETFs are likely to be found in most portfolios, from retail investors’ five-figure accounts to institutional money managers’ multi-billion dollar holdings. The exponential growth of ETFs can be attributed to their many advantages– such as their relatively lower cost, transparency, tax efficiency and liquidity.

The key distinguishing feature of an ETF is that it trades throughout the day on an exchange (hence the term “exchange-traded”) at a market-determined price, just like a stock. In contrast, mutual funds are traded at a single price based on the Net Asset Value (NAV) that is calculated at the end of the trading day. Another key distinction between ETFs and mutual funds is that ETFs are bought and sold by investors and their financial advisors through a brokerage firm; mutual fund trades are transacted directly with the fund company, although the orders are usually placed through a brokerage firm.

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.

The flexible nature of ETFs makes them suitable for use in a variety of strategies, from asset allocation and hedging to short selling, tax optimization and sector rotation.

With thousands of ETFs now available, investors should take due care to evaluate the different options and ensure that the appropriate ETF is selected to meet the desired investment objective.


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