ETF Definition | What Are ETF Funds?

What exactly are ETFs? Well, the Foundation represents the exchange-traded funds. Many consider it one of the best investments you can make. Let's start over and move on.

First, resources in many ways like traditional mutual funds. ETF funds are baskets of securities that is selected either by a fund manager, the team of analysts or a computer program.

Just as mutual funds, are specialized in certain classes of investments and assets. If you receive the Small Cap ETF, which are small businesses that basket.

Some tracks on the track but the S & P 500 composite index, called the SPYDR (see the "spider"). You can find one for virtually all the major indexes like the Dow Jones Industrial Average and most of the Russell indexes.

You can get even. For example, you can invest in ETFs that follow the Russell 2000 which tracks small cap stocks.

Unlike mutual funds, ETFs are traded on free trade, hence the word "change." This has two main advantages and far-reaching consequences.