Exchange Traded Funds (ETF)
An Exchange Traded Fund (ETF) is a security that is listed and traded on a stock exchange, similar to a stock. ETFs are made up of a mixture of securities such as stocks, bonds, commodities etc and typically track the performance of an index or a certain market area.
- Trades on an exchange like a stock
- Made up of a variety of securities
- Track the performance of an index or market area
- Typically have lower fees than mutual funds
Stocks are securities that give you ownership in a corporation, offering greater potential return when a company does well through capital appreciation and dividend payments, but greater potential risk as well. Stocks offer a wide variety of investment options, including common and preferred shares.
Companies and governments issue bonds to the public to raise capital to fund their projects with a set repayment date. Bonds offer lower risk than stocks, but usually a lower return as well.