What is an ETF?

An ETF, or Exchange-Traded Fund, is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. An ETF will experience price changes throughout the day as it is bought and sold. Because it trades like a stock, it does not have a net asset value (NAV) calculated every day like a mutual fund. ETF’s can provide a great way to help diversify a portfolio without the higher management fees, capital gains tax exposure and trading restrictions common with mutual funds.