{"id":12317,"date":"2018-02-02T12:09:14","date_gmt":"2018-02-02T20:09:14","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=12317"},"modified":"2018-02-02T12:09:14","modified_gmt":"2018-02-02T20:09:14","slug":"investor-basics-what-is-an-exchange-traded-fund","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/","title":{"rendered":"Investor Facts: What Is An Exchange-Traded Fund?"},"content":{"rendered":"

An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index.<\/p>\n

ETFs often are compared to index funds, which also use baskets of investments such as stocks or bonds to replicate well-known indexes, such as the S&P 500 Index<\/a> of stocks or the\u00a0broad bond market.<\/p>\n

\"exchange<\/p>\n

While similar to index funds in many ways, ETFs are not mutual funds but marketable securities in their own right. As a result, they can be traded during market hours rather than settling at the end of the trading day.<\/p>\n

Generally, this feature makes ETFs cheaper to buy and sell than their index-fund cousins.<\/p>\n

At their core, exchange-traded funds are baskets of securities that trade on a stock exchange. Think of them as mutual funds that you buy on the stock market rather than from a fund company.<\/p>\n

ETFs can be part of\u00a0a diversified investment portfolio. They\u00a0have features that make them attractive to speculators as well as to long-term investors.<\/p>\n

For instance, an exchange-traded fund by design can provide more tax-efficient investing vs. using\u00a0actively traded mutual funds.<\/p>\n

As with\u00a0traditional mutual funds, different ETFs have different purposes. ETFs initially\u00a0were\u00a0created to trade market indexes. However, there are ETFs that engage in active trading strategies.<\/p>\n

No commission<\/h2>\n

In addition, some\u00a0financial advisors recommend ETFs based on\u00a0their ability to use them in advanced trading or options strategies.<\/p>\n

Further, many low-cost brokerage firms offer a slate of \u201cno commission\u201d ETFs. Zero commissions make it efficient\u00a0to take small positions in the asset class<\/a> represented by the fund.<\/p>\n

Transacting in ETFs requires a more involved approach than traditional mutual funds. ETFs trade during market hours and the price per share will fluctuate during the trading day.<\/p>\n

MarketRiders, Inc. is a registered investment adviser.\u00a0 Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.\u00a0 Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and\/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.<\/i><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"

An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index. ETFs often are compared to index funds, which also use baskets of investments such as stocks … Read more →<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":12319,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[65],"tags":[],"yoast_head":"\nInvestor Facts: What Is An Exchange-Traded Fund? | MarketRiders<\/title>\n<meta name=\"description\" content=\"An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index. ETFs often are compared to index funds.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Investor Facts: What Is An Exchange-Traded Fund? | MarketRiders\" \/>\n<meta name=\"twitter:description\" content=\"An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index. ETFs often are compared to index funds.\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2018\/01\/new-york-540807_1920.jpg\" \/>\n<meta name=\"twitter:creator\" content=\"@marketriders\" \/>\n<meta name=\"twitter:site\" content=\"@marketriders\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"MarketRiders\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/\",\"url\":\"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/\",\"name\":\"Investor Facts: What Is An Exchange-Traded Fund? | MarketRiders\",\"isPartOf\":{\"@id\":\"https:\/\/www.marketriders.com\/investing\/#website\"},\"datePublished\":\"2018-02-02T20:09:14+00:00\",\"dateModified\":\"2018-02-02T20:09:14+00:00\",\"author\":{\"@id\":\"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c\"},\"description\":\"An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index. ETFs often are compared to index funds.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.marketriders.com\/investing\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Investor Facts: What Is An Exchange-Traded Fund?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/#website\",\"url\":\"https:\/\/www.marketriders.com\/investing\/\",\"name\":\"MarketRiders.com\",\"description\":\"How To Become A Better Investor\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.marketriders.com\/investing\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c\",\"name\":\"MarketRiders\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g\",\"caption\":\"MarketRiders\"},\"sameAs\":[\"https:\/\/www.marketriders.com\"],\"url\":\"https:\/\/www.marketriders.com\/investing\/author\/support\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Investor Facts: What Is An Exchange-Traded Fund? | MarketRiders","description":"An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index. ETFs often are compared to index funds.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/","twitter_card":"summary_large_image","twitter_title":"Investor Facts: What Is An Exchange-Traded Fund? | MarketRiders","twitter_description":"An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index. ETFs often are compared to index funds.","twitter_image":"https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2018\/01\/new-york-540807_1920.jpg","twitter_creator":"@marketriders","twitter_site":"@marketriders","twitter_misc":{"Written by":"MarketRiders","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/","url":"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/","name":"Investor Facts: What Is An Exchange-Traded Fund? | MarketRiders","isPartOf":{"@id":"https:\/\/www.marketriders.com\/investing\/#website"},"datePublished":"2018-02-02T20:09:14+00:00","dateModified":"2018-02-02T20:09:14+00:00","author":{"@id":"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c"},"description":"An exchange-traded fund (ETF) is an investment vehicle that tracks a specific investment index. ETFs often are compared to index funds.","breadcrumb":{"@id":"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/www.marketriders.com\/investing\/investor-basics-what-is-an-exchange-traded-fund\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/www.marketriders.com\/investing\/"},{"@type":"ListItem","position":2,"name":"Investor Facts: What Is An Exchange-Traded Fund?"}]},{"@type":"WebSite","@id":"https:\/\/www.marketriders.com\/investing\/#website","url":"https:\/\/www.marketriders.com\/investing\/","name":"MarketRiders.com","description":"How To Become A Better Investor","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.marketriders.com\/investing\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/f2be262f5c0f3ed5ad50d6c40640ba8c","name":"MarketRiders","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.marketriders.com\/investing\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/8e06113f594828daaf313d283544d566?s=96&d=mm&r=g","caption":"MarketRiders"},"sameAs":["https:\/\/www.marketriders.com"],"url":"https:\/\/www.marketriders.com\/investing\/author\/support\/"}]}},"_links":{"self":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts\/12317"}],"collection":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/comments?post=12317"}],"version-history":[{"count":4,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts\/12317\/revisions"}],"predecessor-version":[{"id":12332,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/posts\/12317\/revisions\/12332"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/media\/12319"}],"wp:attachment":[{"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/media?parent=12317"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/categories?post=12317"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.marketriders.com\/investing\/wp-json\/wp\/v2\/tags?post=12317"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}