What is an ETF? An exchange-traded funded is an investment fund and exchange-traded product they are traded on stock exchanges. Somewhat similar to mutual funds, but ETFs are usually bought and sold throughout the day on stock exchanges while mutual funds, except that ETFs are bought and sold throughout the day. Mutual funds are bought and sold based on their price at day’s end.

ETFs have many different types of investments, which include stocks, commodities, bonds, and a mixture of investment types. An exchanged traded fund is a marketable security, meaning it has an associated price that allows it to be easily bought and sold. Additionally, ETFs share prices fluctuate all day as the ETF is bought and sold; this is different from mutual funds that only trade once a day after the market closes.

ETF Categories

Bond ETFs- Contain government bonds, corporate bonds, state and local bonds also known as “municipal bonds.”

Industry ETFs- Track a particular industry such as technology, banking, or the oil and gas sector.

Commodity ETFs-Invest in commodities such crude oil and gold.

Currency ETFs- Allows one to invest in foreign currencies such as the Euro or Canadian dollar.

Inverse ETFs- Allows one to gain stock that declines by shorting stocks.

How to Buy and Sell an ETF?

ETFs can be purchased through online brokers and traditional broker dealers.

I do believe in transparency. I am not an expert on the stock market each day I attempt to learn and study it. I recommend studying from sites such as Investopedia and Nerd Wallet.

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