| Exchange-Traded Fund - ETF | |
 A security that tracks an index and represents a basket of stocks like an index fund, but trades like a stock on an exchange, thus experiencing price changes throughout the day as it is bought and sold. |
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 Because it trades like a stock whose price fluctuates daily, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund. By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order. The most widely known ETFs are SPDR (Spider), which tracks the S&P 500 index and QQQ, which tracks the Nasdaq-100 Trust. |
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 Advantages Of Exchange-Traded Funds - The unique structure of these vehicles opens multiple opportunities for investors. Find out what they are. Introduction To Exchange-Traded Funds - Get into ETFs and enjoy the benefits of a mutual fund with the flexibility of a stock. Index Investing Tutorial - Get to know the most important market indexes, and the advantages and disadvantages of investing in them. |
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