Exchange-Traded Funds

An investment company whose objective is to match the performance of a particular index - in this case, an international one - is called an exchange-traded fund (ETF). ETFs are a hybrid of individual securities and mutual funds. Just like stocks, ETFs are listed and trade on the exchanges. You may also use the same trading orders - like market, stop and limit - that you do with stocks. However, like mutual funds, you are buying shares of a fund, which in turn invests in a portfolio of securities.

You can decide to track the index of a particular country, region, or even the world through an ETF. For example, an ETF might attempt to duplicate the performance of an index that tracks select companies in Germany, those throughout Europe, or companies located around the world.

Before investing in an ETF, carefully consider the investment objectives, risk, charges, and expenses. A prospectus contains this and other information about the mutual fund and is available through www.scottrade.com or through a Scottrade branch office. The prospectus should be read carefully before investing.

As with any investment, the costs and risks associated with ETFs vary depending on the type of fund in which you're invested.

Investors should consider the investment objectives, risks, charges, and expenses of an Exchange Traded Fund (ETF) carefully before investing. A prospectus contains this and other information about the ETF and can be obtained from the issuer. The prospectus should be read carefully before investing.