Guide to ETFs

By ETF.com


Welcome to the ETF Education Center. We've prepared a complete series of articles that walks you through the basics of ETFs, teaching you everything you need to know to get started with these powerful investment tools.

In a hurry? Just watch the webinar.


In this 30-minute pre-recorded webinar, ETF.com's CEO Matt Hougan explains what ETFs are, how they work and how you can use them in a portfolio. Pick up powerful tips on how to trade ETFs, and how to avoid any potholes. This webinar is a powerful supplement to the articles listed below.


etf_101_matthougan_webinar

Exchange-traded funds are a new type of mutual fund that is changing the way investors invest.

Investors often use the term 'ETF' to mean many things that aren't technically 'exchange-traded funds.'

As you might expect by this website's name, we like ETFs. We think they're often the right investment choice for many investors.

ETFs are great. But how do you choose?

The first thing people talk about when they talk about ETFs is their low fees.

The key to understanding how ETFs work is the 'creation/redemption' mechanism.

Two of the great, underappreciated advantages of ETFs are their transparency and tax efficiency.

When you talk about trading ETFs, you have to talk about two kinds of trades.

ETFs operate at two levels of liquidity: that of the ETF itself, and what the ETF holds.

APs are one of the major parties at the center of the ETF creation/redemption mechanism.

Homebuilders who construct houses that stand for hundreds of years do a better job than those whose homes collapse after a short period.

When selling a car, people don't accept the first price a used-car salesman quotes as its actual value.

Confusing as it seems, ETFs have more than one 'price.'

ETF investing has often been lauded for its transparency.

How do you know if an ETF is doing its job well?

Securities lending is a fairly simple process that can generate extra returns for ETF investors.

Like any business, even low-cost ETFs need to generate revenue to cover their costs.

ETFs trade like stocks. ETFs trade nothing at all like stocks. Both statements are true.

For individual stocks, liquidity is about trading volume and its regularity. For ETFs, there's more to consider.

We believe most investors choose an ETF to express an investment opinion, and to access the pattern of returns expected from that opinion.

Passive investing. It sounds worse than boring.

The goal of most ETFs is to track an index's performance. Fund managers have two ways to do this.

Investors spend hours researching funds for expense ratios and spreads, trying to save a few basis points

The breadth of investment opportunities has never been greater, but the range of opportunity can be intimidating.

You've probably heard ETF.com say numerous times, 'not all ETFs are created equal.'

The MLP ETP space has gotten very crowded very quickly.

Fixed-income securities are a mainstay of investor portfolios.

'Bond prices go down when interest rates go up.' That's the oft-repeated maxim in fixed-income investing.

Senior bank loans are a form of debt financing issued by a private institution.

ETFs typically trade at something close to 'fair value.'

Exchange-traded funds have revolutionized the way investors buy and sell commodities.

Investors buying commodity ETFs naturally focus on the prices of the commodities themselves.

We explain three components of futures returns.

An age-old debate in commodity investing is whether to buy the raw material itself or the stocks of the producers of said raw material.

An ETF's taxation is ultimately driven by its underlying holdings.

For U.S.-based investors, choosing the right currency ETF for your investment objectives has two steps ...

An ETF's taxation is ultimately driven by its underlying holdings.

On the surface, picking the right target-date fund couldn't be easier.

The VIX index attracts traders and investors because it often spikes way up when U.S. equity markets plunge.

On their face, hedge funds and ETFs have little in common.

Leveraged and inverse ETFs are powerful tools that allow investors to magnify the returns on an investment.

Most leveraged/inverse ETFs reset their leverage daily, but some have monthly reset periods.

Bonds offer safe, steady and predictable returns that have low correlations to stocks.

Since liquidity in the bond market has dried up, many investors worry about the liquidity risk of ETFs based on those bonds.

In a few key ways, bond ETFs differ from the equity ETFs you know and love.

Bond ETFs are cheaper, more tradable and more transparent than bond mutual funds.

Bond ETFs possess some unique tax implications. What three things should every bond ETF investor know?

ETF.com's free and easy-to-use ETF Finder helps you find the ETFs you need for your bond ETF portfolio.

Bond ETFs come in many different flavors, but generally fall into one of four categories ...