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.

References in periodicals archive ?
First Trust has collective assets under management or supervision of approximately USD 113bn as of December 31, 2018 through unit investment trusts, exchange-traded funds, closed-end funds, mutual funds and separate managed accounts.
But ultimately, Herman believes, it will help in that "it is going to be more transparent and less obtuse for participants." Carpenter likes the fact that an exchange-traded fund levels the playing field in full fee disclosure.
Exchange-traded funds' slow rate of acceptance into 401(k) platforms has led many to doubt their long-term viability in this market.
"The past year has seen significant growth in investor interest in exchange-traded funds and research is an important component in helping individuals and advisors understand and invest in this market."
The Gulf's first exchange-traded fund (ETF) will launch on the Abu Dhabi market on Thursday.
What is an exchange-traded fund? How are shareholders in an exchange-traded fund taxed?
on Monday launched an exchange-traded fund (ETF) linked to the 30-issue Dow Jones Industrial Average traded on the American Stock Exchange.
If you're looking for an investment product that is flexible, liquid, inexpensive and easy to understand, you may find an exchange-traded fund (ETF) to your liking
First Trust Advisors LP announced on Thursday a monthly distribution of USD0.1158 per share for First Trust Enhanced Short Maturity ETF (Nasdaq:FTSM), a series of First Trust Exchange-Traded Fund IV.
Holdings of the largest gold-backed exchange-traded fund, the SPDR Gold Trust(GLD.P), dipped 0.25 percent to 1,090.27 tonnes on Thursday, from 1,092.98 on Wednesday.
Securities in the SET50 index, exchange-traded fund (ETF) units, and ETF-linked funds will remain available for short-selling.