An exchange-traded fund, or ETFs, is similar to mutual fund. Like a stock, it is traded on exchange. Investing in ETFs builds a diversified portfolio and provides liquidity at a low-cost, making it a great option for young investors. It offers advantages over stocks.
ETFs trade like stocks, are subject to investment risk, fluctuate in market value, and may trade at prices above or below the ETF’s net asset value (NAV). Upon redemption, the value of fund shares may be worth more or less than their original cost. ETFs carry additional risks such as not being diversified, possible trading halts, and index tracking errors.
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