Exchange-Traded Funds (ETFs)
Exchange-traded funds invest in a broad group of securities – such as stocks and bonds. They trade on a market exchange, like a stock, and are purchased through a brokerage.
Market trading. ETF prices typically change continuously during trading hours, allowing investors to place orders at specific prices. Some ETFs also allow short selling and may be marginable.
Diversification. Because ETFs hold a basket of securities, they can potentially offer diversification within asset classes, such as U.S. stocks, emerging stocks or international bonds.
Portfolio alignment. Most ETFs own the securities in a specific index, like the S&P 500, which may make it easier to determine whether a particular ETF aligns with your portfolio.
Cost. ETFs typically have lower expense ratios than mutual funds.
Transparency. Most ETFs publish their holdings daily.
Learn More about ETFs, including everything from the basics to investing and trading strategies.
*The Exchange Traded Funds selected by Zacks for the Select List have been derived from a universe of ETFs maintained by Zacks for its own proprietary research products and services. Zacks is not affiliated with Scottrade. None of the information provided should be considered a recommendation or solicitation to invest in, or liquidate, a particular security or type of security. Investors should fully research any security before making an investment decision.
Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market.