ETF

Traded index fund

An ETF (exchange-traded fund) is an investment fund that trades on stock exchanges like individual shares.

ETFs typically track an index, commodity, or basket of assets: She put her savings into a low-cost S&P 500 ETF.

Unlike mutual funds, ETFs can be bought and sold throughout the trading day at market prices.

structure

exchange-traded

Traded on formal markets

basketWoven carrying vessel
sharesUnits of company ownership
securitiesTradeable financial assets

premium · discount · ticker · prospectus · custodian · benchmark · replication · sampling

trading

intraday

Within a single day

volumeAmount of space filled
liquidityConvertibility to cash
executionCompleting a planned task

slippage · arbitrage · brokerage · commission · settlement · clearing · stop-loss

portfolio

diversification

Expanding into varied areas

rebalancingRestoring proper proportions
robo-advisorAutomated investment management platform
IRATax-advantaged retirement fund

types

passive

Not actively participating

Categories

financial termswealth, asset, currency, balance sheet, audit
finanzasbanco, euro, hacienda, evasion, bolsa
personal financesavings, income, credit, investments, bills
Wall Streetstock market, bond market, stocks, shares, Wall Street
fundsfund, funds, mutual fund, trust fund, hedge fund
corporate financecost of capital, investment, capital markets, NPV, debt financing

Opposites

investment vehicle structure

ETFstock picking

Choosing specific shares to purchase

active management · day trading · value investing · stock speculation

trading mechanism

Pooled, managed investment vehicle

hedge fund · private equity fund · annuity · certificate of deposit

management approach

Private investment partnership

stock picker · active management

Family

Familiarity: Top 500,000
Profile: Used worldwide · Timeless · Abstract · Rated G