What Are ETFs?

If you’re just now getting acquainted with exchange traded funds (ETFs), you’re probably wondering what makes them different and better than other investment tools out there. ETFs are similar to mutual funds, in that they’re generally baskets of stocks. But that’s pretty much where the similarities end. ETFs are better. Why? Two of the major reasons are that they trade throughout the day, and they’re completely transparent, meaning, you know what shares the fund holds at any given time. ( How to use ETFs in a post-buy-and-hold world ).