ETFs (Exchange-Traded Funds)

ETFs are a particular type of mutual fund. These ever-more popular investment vehicles pool investments and employ strategies consistent with mutual funds, but they are structured as investment trusts that are traded on stock exchanges and have the added benefits of the features of stocks.  For example, ETFs can be bought and sold at any point throughout the trading day.  Some additional points of interest include:

• ETFs can also be sold short or purchased on margin. 
• ETFs also typically carry lower fees than the equivalent mutual fund. 
• Many ETFs also benefit from active options markets, where investors can hedge or leverage their positions. 
• ETFs also enjoy tax advantages from mutual funds. 
• Compared to mutual funds, ETFs tend to be more cost effective and more liquid. 
• The popularity of ETFs speaks to their versatility and convenience.