Exchange-traded fund (ETF) shares may look like stocks in the marketplace, but the way their shares are created is very different. Unlike stock shares, which are finite in number unless the company issues more, ETF shares can be created or removed from the market at any time.
Exchange-traded funds (ETFs) are an emerging class of funds that trade like stocks and often follow an index. They can be bought and sold throughout the market day, and they can potentially offer portfolio exposure to the world's leading indexes.
It's important for investors to understand the key differences between exchange-traded funds (ETFs) and their two closest relatives: stocks and mutual funds. Each has its advantages and disadvantages.