WHAT IS AN EXCHANGE-TRADED FUND?

An exchange-traded fund (ETF) 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 and typically have higher daily liquidity and lower fees than mutual funds, making them a good option for individual investors. Because it trades like a stock, an ETF does not have its net asset value calculated once at the end of every day like a mutual fund.