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Features
Israel-Focused ETFs’ Outflows Jump Amid Rising Tensions
Gabe Alpert | Jul 27, 2023
Daily ETF Watch
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Weekly ETF Flows
ETF Inflows Rebound From Prior Week’s Losses
Dan Mika | Jul 30, 2021
Daily ETF Watch
ETF Odds & Ends: Funds Switch To ICE Indexes
Heather Bell | Jul 16, 2021
Weekly ETF Flows
'GOVT’ Bolsters Weekly ETF Inflows
etf.com Staff | Apr 12, 2019
News
Sector Shuffle Not Taxing At All
Lara Crigger | Sep 28, 2018
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Global Tech ETF Topping Charts
Cinthia Murphy | Aug 23, 2018
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3 ETFs Rising With LinkedIn Deal
Cinthia Murphy | Jun 13, 2016

FAQs

An ETF, or "exchange-traded fund," is a pooled investment security like a mutual fund but it trades on an exchange like a stock. Most ETFs passively track a benchmark index, such as the S&P 500, while some are actively managed.

ETFs track a benchmark index by holding all the securities in the index in equal proportion to their weighting in the index. Some ETFs track the price movement of a specific asset or commodity. To track price movement, these ETFs often invest in derivatives or futures contracts, but they may hold a physical asset, such as gold, by storing it in a vault.

How an ETF is taxed depends primarily on the fund’s underlying holdings and the form of distributions paid to shareholders. For example, a dividend ETF will be taxed on the dividends distributed. Investors may also incur capital gains tax on the profit earned from selling an ETF. The ultimate tax paid may also depend on the shareholder’s tax bracket.

Many ETFs pay dividends, and some track a dividend index and hold only dividend-paying stocks. The way it works is the ETF collects the dividends and distributes them to the fund’s shareholders, usually on a periodic basis, such as quarterly. Investors may choose to receive the dividends, or they may reinvest the dividends to buy more shares of the ETF.

Most ETFs are structured as open-end funds, which typically provide investors with exposure to the main investment asset classes, such as stocks and bonds. ETFs may also be structured as unit investment trusts, grantor trusts or limited partnerships.

Expressed as a percentage, an expense ratio tells an investor how much they’ll pay over the course of a year to own a mutual fund or an ETF. These expenses pay for costs associated with fund operation, such as marketing, advertising and management of the fund portfolio.

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Terms of Use

ESG Research LLC’s ("MSCI ESG") Fund Metrics products (the "Information") provide environmental, social and governance data with respect to underlying securities within more than 24,000 multi-asset class Mutual Funds and ETFs globally. MSCI ESG is a Registered Investment Adviser under the Investment Advisers Act of 1940. MSCI ESG materials have not been submitted to, nor received approval from, the US SEC or any other regulatory body. None of the Information constitutes an offer to buy or sell, or a promotion or recommendation of, any security, financial instrument or product or trading strategy, nor should it be taken as an indication or guarantee of any future performance, analysis, forecast or prediction. None of the Information can be used to determine which securities to buy or sell or when to buy or sell them. The Information is provided "as is" and the user of the Information assumes the entire risk of any use it may make or permit to be made of the Information.