EXCHANGE TRADED FUNDS
Economics
- It is a security that tracks indices, commodities, bonds, or asset baskets, similar to an index fund.
- Unlike traditional mutual funds, ETFs are traded on stock exchanges, with prices changing throughout the day based on supply and demand.
- They provide greater liquidity and lower fees than mutual funds, making them attractive to individual investors.
- ETFs are generally more tax-efficient and offer a diverse range of investment options, including equity, bond, commodity, international, and sectoral/thematic ETFs.
- Most ETFs are passively managed, aiming to replicate the performance of a specific index.