What exactly is an ETF?

[hbliss23]

Well I'm only 14, but I'm researching investments and stocks. I've asked several different sources, and I've been recommended to try an "ETF" for my age, and amount of money.

My question is this: What exactly, in simple terms, is an Exchange Traded Fund? What I'm thinking right now from what I've read is a fund I provide a broker for a certain market, who in turns diversifies my money into that market, giving me a much more stable return.

Is that right, or am I just way wrong here?

Thanks for the help!

[Xanthia Alysha]

They are just funds that mimic the performance of a particular index. It makes it easier to invest without having to actually have all of the weights of the individual stocks that make up that specific index. Also, on a larger scale it reduces transaction costs.

[michael9]

March 3, 2010 Stock News Release - click here





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