Exchange Traded Funds

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Exchange Traded Funds (ETF)

Also known as ETF. A basket of stocks similar to an index mutual fund. However, there are a number of important differences between ETFs and mutual funds. The ETF can be traded within the day, they can be shorted, purchased on margin and there even exists options on some ETFs.

Exchange-Traded Fund

A security that represents all the stocks on a given exchange. For example, an exchange-traded fund may track the Standard and Poor's 500. The organization issuing the exchange-trade fund owns each of the stocks traded on the S&P 500 in approximate ratio to their market capitalization. ETF shares can be bought, sold, short-sold, traded on margin, and generally function as if they were stocks. Investors use exchange-traded funds as a way to easily diversify their portfolios at relatively low cost. See also: SPDR.
References in periodicals archive ?
We hope to increase the number of assets we administer in addition to attracting new investors, and for this reason we are interested in exchange traded funds.
Exchange traded funds provide investors the opportunity to cover entire markets in various countries and sectors, at a cheaper rate than other means of investing.
There are just six fixed income exchange traded funds.