What Are ETFs?

Exchange Traded Funds (ETFs) are similar to mutual funds in some ways and like a stock in others. They are listed and traded on exchanges like stocks. Like mutual funds, these funds are groupings of individual stocks, bonds or other investments. Unlike mutual funds, an investor may buy or sell shares throughout the day. When shares of a mutual fund are bought or sold, the shares are purchased or redeemed through the fund and the overall net asset value of the fund is affected. Many ETFs are index based, which may result in lower internal fees than with actively managed mutual funds since no day-to-day active management is required. These investments simply seek to replicate the index they are modeled after.

Exchange Traded Funds have been around since the early 1990's but are still relatively unknown in everyday investing. Why? These investment vehicles have been used by financial professionals, and not heavily marketed directly to the individual investor until now. You may have heard of some of the more common examples of ETFs: SPYDERS (SPY), DIAMONDS (DIA) AND CUBES (QQQQ), these are all Exchange Traded Funds.



  •  Low cost
  •  Tax-efficient
  •  Diversification 

ETFidea, LLC offers individuals and their advisors a way to utilize Exchange Traded Funds, as well as other investments in a managed program. These funds are selected for each client based on risk tolerance, time horizon and individual investment objectives.