Home Finance Guru
| Register
Banner
Banner






Ask 2 Experts
 
1. Til Debt Do Us Part
2. Recession-Proof Your Relationship!
3. World Changing Couples
4. How To Host A Budget Friendly Adult Birthday Party
5. How To Live Large Without Breaking the Bank
6. Top 10 Power Couples of All Time
7. Sweetie, Want to Run a Business Together?
8. Take This Career and Shove It!
9. Q&A: Money Expert Jacquette M. Timmons
10. Budget Boot Camp
Advertise With Us!
 
Q: I'm hearing a lot about ETFs lately. What are they?

Diana says...
Exchange-traded funds, or ETFs, are a close cousin to in­dex-based mutual funds, which track one of the many stock indexes such as the S&P/TSX 60 or the S&P 500. An ETF—a mini-mix of every stock in a particular index—trades as a stock on the ex­changes, so you need a broker to buy one. Traditional index-based mutual funds, on the other hand, don’t trade as stocks and can be widely purchased through banks, fund dealers, and financial advisors. ETFs have become popular because they come with much cheaper fees than standard mutual funds. To compare fees among ETFs or mutual funds, read the small print in the prospectus (the legal document for all securities offered for sale) that indicates “management expense ratios.”

Diana Cawfield is an award-winning financial writer with more than 10 years experience. Send her your questions here.