The first ETF was the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index and is still actively traded today.
Key Points:
ETFs are like stocks and trade throughout the day, unlike mutual funds that only trade once a day.
ETFs can include various investments like stocks, commodities, or bonds, and can offer U.S. or interna
They are cost-effective and more liquid compared to mutual funds.
An ETF is called an exchange-traded fund because, like stocks, it's traded on an exchange. The price of ETF shares changes during the trading day as the
ETFs hold multiple underlying assets, making them suitable for diversification. They can include various investments, such as stocks, commodities, bonds, or a mix. ETFs can own hundreds or thousands of stocks from various industries or focus on a specific sector. Some ETFs concentrate on U.S. holdings, while others
ETFs are marketable securities, with share prices allowing easy buying and selling throughout the day. In the U.S., most ETFs are open-ended funds regulated by the Investment Company Act of 1940.
Types of ETFs
Passive and Active ETFs: Passive ETFs replicate an index's performance, while active ETFs have portfolio managers selecting securities.
Bond ETFs: Provide regular income based on underlying bonds.
Stock ETFs: Comprise a basket of stocks tracking a single industry or sector.
Industry/Sector ETFs: Focus on a specific sector or industry.
Commodity ETFs: Invest in commodities like crude oil or gold.
Currency ETFs: Track currency pairs, providing various purposes
Inverse ETFs: Profit from stock declines by shorting stocks.
Leveraged ETFs: Seek multiples of the underlying investments' return, often using derivatives.
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source:https://www.investopedia.com/terms/e/etf.asp
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