Back to Basics: What Is An ETF?
August 20th, 2010 at 1:00am by Tom Lydon
Do you think you know what an exchange traded fund (ETF) really is? If so, read on.
An exchange-traded fund (or ETF) is essentially a mutual fund that trades like an individual stock, which has been an age-old comparison at this point.Anytime the investor or trader feels like trading the fund, they can do so, same as a single stock. The total popularity of the ETF business has caused a massive birth of new and unique funds that trade with the ease of a stock. [ETF Examination.]
Jay Keapple for The San Francisco Chronicle says that investors can now take long and/or short positions – as well as in many cases, leveraged long or short positions – in the following types of securities:
- Foreign and Domestic Stock Indexes (large-cap, small-cap, growth, value, sector etc.)
- Currencies (yen, euro, pound etc.)
- Commodities (physical commodities, financial assets, commodity indexes etc.)
- Bonds (treasury, corporate, munis international)
For more stories about ETFs, visit our ETF 101 category.
Tisha Guerrero contributed to this article.
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