ETFs Explained

VIDEO

Exchange traded funds (ETFs) offer diversified and transparent access to the world’s investment markets and can be easily traded on a stock exchange.

Learn more below

What is an ETF?

An ETF, or Exchange traded fund, is a group of diverse assets that trades on a stock exchange as a unit.

Imagine a set of building blocks. Each block is a piece in and of itself, but if you group them together, they create a structure, or an ETF.

An ETF is made up of several diversified “building blocks” such as stocks, bonds or commodities. An individual block can represent a company (Apple) or country (Mexico), but together they form an industry (technology) or a continent (Latin America).

ETFs are characterized for being:

Diversified: they contain a variety of assets such as stocks, bonds and commodities

Transparent: you can see the underlying investments contained within each ETF

Accessible: ETFs provide access to markets and industries worldwide

Flexible: ETFs operate similarly to stocks; they can be traded as long as the exchange where they are traded is open, and their price adjusts throughout the day

Cost Efficient: Management fees on most ETFs are usually much lower than mutual funds, which increases the possibility of better returns

What is an ETF?

An ETF, or Exchange traded fund, is a group of diverse assets that trades on a stock exchange as a unit.

Imagine a set of building blocks. Each block is a piece in and of itself, but if you group them together, they create a structure, or an ETF.

An ETF is made up of several diversified “building blocks” such as stocks, bonds or commodities. An individual block can represent a company (Apple) or country (Mexico), but together they form an industry (technology) or a continent (Latin America).

ETFs are characterized for being:

Diversified: they contain a variety of assets such as stocks, bonds and commodities

Transparent: you can see the underlying investments contained within each ETF

Accessible: ETFs provide access to markets and industries worldwide

Flexible: ETFs operate similarly to stocks; they can be traded as long as the exchange where they are traded is open, and their price adjusts throughout the day

Cost Efficient: Management fees on most ETFs are usually much lower than mutual funds, which increases the possibility of better returns

Learn more about ETFs on our education platform.

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