How Does An Etf Work?

how does an etf work?

How does a ETF work?

2011
12.11

Question by Ryan: How does a ETF work?
I am familiar with most investing options out but I keep hearing others talking about ETF and they make it seem like its the way to good, it seems that I have been hearing ETF are better to go with rather then mutual funds. What are ETF's, how do they work, and is it really the way to go?

How Markets Really Work: Quantitative Guide to Stock Market Behavior (Bloomberg Financial)
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Larry Connors

I will be doing some of my own reading on them in addition but please provide me with the information necessary to get up to date and have a good overview on ETF's.

Any other info, tips, or opinion related to the topic will be greatly appreciated!

Thank you.

Best answer:

ETFs for the Long Run: What They Are, How They Work, and Simple Strategies for Successful Long-Term Investing
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Lawrence Carrel

Answer by Good Daze Ahead
In basic terms, an ETF is an index fund that trades on an exchange. Meaning that unlike a mutual fund, it can be bought and sold throughout the day. They tend to have very low fees (just like index mutual funds), but you will have to pay a commission to buy or sell them, just as you would a stock. They have become extremely popular lately for their low expenses, tax efficiency and liquidity.

Check out these for more info.
www.ishares.com

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