Want the ease of stock trading, but diversification benefits of mutual funds? Take a look at exchange-traded funds (ETFs), which combine the best attributes of both assets.
An exchange-traded fund (ETF) is an investment fund that trades on an exchange, like a stock. ETFs are similar to mutual funds except ETF shares can be bought and sold throughout the trading day. Mutual funds trade only at market close.
ETFs offer the best attributes of two popular assets: They have the diversification benefits of mutual funds while mimicking the ease with which stocks are traded. Like any financial product, ETFs aren’t a one-size-fits-all solution. Evaluate them on their own merits, including management costs and commission fees (if any), how easily you can buy or sell them, and their investment quality.
ETF = Exchange-traded fund
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