ANSWERS: 1
  • Exchange-traded funds are investment instruments that trade like stocks but that track an index. The Spider (SPDR) fund, for example, tracks the S&P 500 and is one of the best known ETFs. ETFs have the greater safety of being diversified, yet are as fluid as stocks.

    Value

    Like a stock, the value of an ETF fluctuates through the course of a day as it is bought and sold.

    Valuation

    The net asset value of an ETF is not calculated every day as a mutual fund's is because it trades like a stock.

    Ownership Benefits

    ETFs have the diversification of index funds, and you can sell short, buy on margin and buy as little as one share, as well.

    Broker Commissions

    Stockbrokers charge the same commission to buy and sell ETFs as they do when trading stocks.

    Ownership Expenses

    Expenses associated with owning ETFs are usually lower than those of mutual funds.

    Source:

    Investopedia: Exchange-Traded Fund

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