exchange-traded fund

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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.
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) 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.

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References in periodicals archive ?
Investors trade Exchange Traded Funds for many reasons.
Exchange traded funds serve as open investment funds which follow the movement of specific indicators, listing and trading their supplementary documents on the stock market as shares and bonds.
"Now, with our introduction of these new ProShares, investors for the first time can get leveraged or inverse exposure to VIX futures with an exchange traded fund."
He will report jointly to Bernard Reilly, head of SSgA's business in Asia Pacific and James Ross, senior managing director and global head of Exchange Traded Funds at State Street Global Advisors.
* The number of firms offering exchange traded funds will double to 26 by 2017.
The World Gold Council (WGC) said it has appointed Jason Toussaint as Managing Director of Exchange Traded Gold (ETG), the World Gold Council's global initiative designed to promote and develop the gold Exchange Traded Fund (ETF) and Exchange Traded Commodity (ETC) market.
VanEck is an US asset manager founded in 1955 and included gold investing in 1968, emerging markets in 1993 and exchange traded funds in 2006.
1 July 2013 - US investment management firm BlackRock Inc (NYSE:BLK) said today it had finalised the acquisition of Credit Suisse AG's exchange traded funds (ETF) business, expanding its Swiss market presence.
The actively managed exchange traded funds belong to the First Trust Exchange-Traded Fund VIII and both funds invest in closed-end funds.
Infrastructure Capital Advisors LLC is aregistered investment adviser that manages exchange traded funds and a series of hedge funds.
Investors are investing more in Exchange Traded Funds, expecting the US central bank to increase rates in December.
The actively managed exchange traded funds of the First Trust Exchange-Traded Fund VIII, Nasdaq First Trust CEF Income Opportunity ETF (Nasdaq:FCEF) will pay a monthly distribution of USD0.0900 per share and First Trust Municipal CEF Income Opportunity ETF (Nasdaq:MCEF) will pay a distribution of USD0.0550 per share.