What is a trade exchange fund?

Exchange-traded funds (ETFs) combine aspects of mutual funds and conventional stocks. Like a mutual fund, an ETF is a pooled investment fund that offers an investor an interest in a professionally managed, diversified portfolio of investments.

Exchange Traded Fund (ETF) is a type of investment fund and exchange traded product that tracks the performance of an index or a “basket” of securities (such as shares, bonds, commodities, etc.). ETFs are listed on a stock exchange and trade much like stocks, they provide investors with the opportunity to diversify their investments at relatively lower costs and gain exposure to different asset classes and strategies including;

How do exchange traded funds ETFs work?

Exchange traded funds work like this: The fund provider owns the underlying assets, designs a fund to track their performance and then sells shares in that fund to investors. Shareholders own a portion of an ETF, but they don't own the underlying assets in the fund.