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What is an ETF investment?
By Admin | August 2, 2009
ETFs are trade exchange funds which allow immediate diversification for the smaller investors. They are different from mutual funds in that they allow diversity with fewer limitations. Again they can be traded intra-day while mutual funds cannot. Often, they are optional; making them capable of being both traded and hedged using options. An EFT is an index-linked, not an index tracking stock. The later is similar but tracks only particular index is fully optional and trades large volumes, having tight bid/ask spread and can be used with sell stops automated orders.
Mutual funds offer peace of mind to those who would rather do the watching and have someone do the work. EFTs and index tracking stocks are not actively managed and normally requires that the individual investor provides more oversight.
Generally EFTs outperforms mutual funds without fees. Many online brokerages have ETF, allowing people to look them up by sector, region, or by industry.
Topics: ETF, Finance | No Comments »