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Understanding Exchange Traded Funds (ETFs)

ETF’s are another excellent low-risk investment opportunity with many similarities to mutual funds, but also distinct differences that make it unique.

What’s an ETF?

An exchange traded fund is a large collection of stocks, bonds, commodities, or assets that are bought and sold on a stock exchange.

What Types Of ETF’s Are Available?

– Market ETFs – Bond ETFs – Sector and industry ETFs   – Commodity ETFs   – Style ETFs  – Foreign market ETFs  – Inverse ETFs

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So How Exactly do ETFs work

It’s a large collection of commodities, stocks, bonds, etc. But the creation of an ETF requires that companies, or issuers, provide shares in their company to the fund.

ETF vs Individual Stocks

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ETFs carry less risk than stocks. Because an ETF is a mixed collection of stocks and bonds.

ETF vs a Mutual Fund

They are both low risk, have low brokerage fees and you can easily find options in both that allow you to invest at home and abroad.

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