An ETF is a publicly traded fund that is multiple stocks in a certain sector. Each ETF can be made by a different company. Basically, when you buy an ETF it is easier to manage because you will be owning multiple stocks at a time; it is like a mutual fund. This will help you spread out your risk within a certain sector.

I am sure you are wondering the difference between an ETF and a Mutual Fund… There are a few differences that can really make you want to start using ETF’s instead of Mutual funds. Here are a few of the big differences.

1. ETF’s can be bought and sold at any time
2. ETF’s do not have fees like Mutual funds do

When in a mutual fund, say in one day you went up 10% in the middle of the day and put a sell order in, you can’t sell until the very end of the day. This means you might think you will get 10% profit, but the fund could loose ground and you only make 5% because the ending price. Also, mutual funds have high fee prices. It is like buying each stock in that fund indiviually. Imagine the fees you would have at the end of your buying spree, that is basically how high your fees for mutual funds are. Granted that is not all the cases; ETF’s have the normal trading fee of any stock at your broker.