Exchange-traded fund

How does an ETF work?

Exchange-traded funds or ETFs pool together securities and then divide them up into smaller units to sell to investors. The securities in the portfolio are the same as those on an index of an exchange, in the same weightage, but with more volumes. ETF units get traded like a share on an exchange, offering intra-day liquidity.

Are exchange-traded funds a good investment?

ETFs are a product of passive investing, and carry low transactional costs for the investor, as a result.

What is the difference b/w ETFs and Mutual Funds?

ETFs and Mutual funds both comprise stocks or different types of assets such as metals or commodities, but ETFs track an index whereas a mutual fund is usually actively managed. 

Do ETFs pay dividends?

Yes, dividends that are earned on the stocks, which are the part of ETFs are paid either on a quarterly basis or as per the policies of the ETF fund manager.

ETFs can be bought or sold just like a stock.