What Is The Definition of Exchange Traded Funds?
Exchange traded funds or ETFs have become popular securities for both long-term investors and short-term traders. ETFs provide investors an easy way to take positions in a wide range of assets from stocks and bonds to precious metals and foreign currencies.FunctionETFs are investment companies similar to mutual funds. Investors hold shares of a portfolio of securities managed by an investment company. ETFs typically have low expenses compared to mutual funds.LimitationsExchange traded funds hold securities or assets to mirror an index like the S&P 500 or track a commodity price like gold or oil. ETFs are not actively managed to attempt to beat the market.FeaturesShares of an exchange traded fund can only be purchased and sold on stock exchanges like shares of stock. Exchange trading allows investors to move in and out of ETFs throughout the trading day.HistoryThe first ETF was SPY, the SPDR S&P 500 launched in 1993. The first international stock ETF came in 2000. The number of availabl
