exchange-traded fund

(redirected from Exchange-traded)
Also found in: Dictionary, Thesaurus, Financial.

exchange-traded fund

(ETF), in finance, an investment company that in exchange for the deposit of a portfolio of stocks, bonds, commodities, or other assets issues securities that represent those assets and may be traded like shares of stock. Shares in an ETF may only be issued to the fund's authorized participants, typically large financial institutions, and usually in a large block of 10,000 to 50,000 shares, known as creation units. Shares in an ETF must also be redeemed in creation units. ETF shares may be purchased and traded by most individual investors using a brokerage account.

Most ETFs are similar to index funds (see mutual fundmutual fund,
in finance, investment company or trust that has a very fluid capital stock. It is unique in that at any time it can sell or redeem any of its outstanding shares at net asset value (i.e.
..... Click the link for more information.
) in that they represent a portfolio that is designed to track an index of a financial market, such as the S&P500. ETFs, however, track a greater range of indexes and thus offer more options and more specifically targeted choices for an investor. Unlike shares in a mutual fund, which may be redeemed only at the end of the business day when the net asset value is determined, ETF shares may be bought or sold at any time on an exchange and also may be sold short and purchased on margin, which is useful for traders. In general, compared to mutual funds, ETFs are more useful to the active trader with larger financial resources than to the long-term small investor. The first ETF was created in 1993 in the United States; the number of ETFs and amount of money invested in them grew significantly in the early 21st cent.

References in periodicals archive ?
Aspects of the operation of exchange-traded managed funds are protected intellectual property held by an Eaton Vance affiliate, Navigate Fund Solutions LLC (Navigate).
Exchange-traded funds will henceforth be available through Schwab Index Advantage, including low investment costs, a broad range of asset classes, transparency and timeliness of trades.
To address the unique features of ESOs that differentiate them from exchange-traded options (see chart on page 55), AG/E has developed two new valuation models.
Simply put, exchange-traded funds are open-ended mutual funds that are listed and traded on a stock exchange.
In these respects, privately negotiated contracts have different characteristics from exchange-traded contracts generally and agricultural futures in particular.
ETC's ETF-in-a-Box[TM] Solution is a turnkey platform that provides time-sensitive and cost-effective methods to bring an exchange-traded fund to market.
The company intends to place six issues of exchange-traded bonds of the series ?
The PIMCO Total Return Exchange-Traded Fund (ETF) is designed to provide investors with another way to access PIMCO's Total Return strategy.
Exchange-traded AGBs offer a convenient and readily accessible way to invest in bonds issued by the Australian Government.
Yorkville, an asset management firm that is a wholly owned subsidiary of Yorkville ETF Holdings, LLC, is built to meet the growth and demand for income-generating exchange-traded funds.
Exchange Traded Concepts (ETC) is a firm built as a portal to launch new, custom exchange-traded funds efficiently and cost-effectively through a complete turnkey solution.
Exchange Traded Concepts' ETF-in-a-Box[TM] Solution is a turnkey platform that provides the fastest and least expensive method to bring an exchange-traded fund to market.