An exchange-traded fund (ETF) is a type of investment fund and exchange-traded product, i.e. they are traded on stock exchanges.
ETFs are similar in many ways to mutual funds, except that ETFs are bought and sold from other owners throughout the day on stock exchanges.
The most popular ETFs in the U.S. replicate the S&P 500 Index, the total market index, the NASDAQ-100 index, and so on.
ETFs are a low-cost way to earn a return similar to an index or a commodity. They can also help to diversify your investments. You can buy and sell units in ETFs through a stockbroker, the same way you buy and sell shares.
However, ETFs also have disadvantages.
In this video, Jack Bogle, who created the first index fund in 1975, discussed why he worried about ETFs.
Warning: This video is to show you John Bogle’s view about ETF. Please do your research before doing any investment. A good balance between return and risk is the key to investment success.
Source: Finance Jane.
