Overview of Exchange-Traded Funds (ETFs)

These flashcards cover key concepts related to Exchange-Traded Funds (ETFs), including their definition, trading characteristics, investment types, advantages, and comparisons with mutual funds.

What does ETF stand for?

Exchange-Traded Fund.

How are ETFs traded?

Like individual stocks, on stock exchanges.

What do ETFs typically invest in?

A collection of assets like stocks, bonds, or commodities.

What is one major advantage of ETFs?

Diversification - exposure to many assets with one purchase.

What is the difference between ETFs and mutual funds?

ETFs trade during the day like stocks; mutual funds trade only after market close.

Do ETFs have high or low fees?

Generally low fees.

Name a popular ETF that tracks the S&P 500.

SPY (SPDR S&P 500 ETF).

Can ETFs focus on sectors or themes?

Yes, examples include tech ETFs, healthcare ETFs, and ESG ETFs.