COM 104 Lecture Notes - Lecture 12: Mutual Fund, Arbitrage, Investment Fund
18 Jun 2018
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Exchange-traded fund
An ETF, or exchange-traded fund, is a marketable security that tracks an index, a
commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds,
an ETF trades like a common stock on a stock exchange. ETFs experience price
changes throughout the day as they are bought and sold. ETFs typically have
higher daily liquidity and lower fees than mutual fund shares, making them an
attractive alternative for individual investors.
Because it trades like a stock, an ETF does not have its net asset value (NAV)
calculated once at the end of every day like a mutual fund does.
BREAKING DOWN 'Exchange-Traded Fund (ETF)'
An ETF is a type of fund that owns the underlying assets (shares of stock, bonds,
oil futures, gold bars, foreign currency, etc.) and divides ownership of those assets
into shares. The actual investment vehicle structure (such as a corporation or
investment trust) will vary by country, and within one country there can be multiple
structures that co-exist. Shareholders do not directly own or have any direct claim
to the underlying investments in the fund; rather they indirectly own these assets.
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
An etf, or exchange-traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an etf trades like a common stock on a stock exchange. Etfs experience price changes throughout the day as they are bought and sold. Etfs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors. Because it trades like a stock, an etf does not have its net asset value (nav) calculated once at the end of every day like a mutual fund does. An etf is a type of fund that owns the underlying assets (shares of stock, bonds, oil futures, gold bars, foreign currency, etc. ) and divides ownership of those assets into shares. The actual investment vehicle structure (such as a corporation or investment trust) will vary by country, and within one country there can be multiple structures that co-exist.
