An Exchange-Traded Fund (ETF) is an investment product that blends features of mutual funds and individual stocks. Like mutual funds, ETFs can hold a diversified mix of assets such as equities, bonds, commodities, or currencies. However, unlike mutual funds, ETFs are listed on stock exchanges and can be traded throughout the day at market prices, similar to regular shares.

ETFs can follow different management approaches. Passive ETFs typically track an index or sector, offering investors broad diversification at relatively low cost. Active ETFs, on the other hand, are managed by professionals who make investment decisions in pursuit of specific objectives, much like traditional mutual funds. These may be designed around indexes, sectors, or alternative strategies, and can also employ tools such as leverage.

Why Consider ETFs?

• Diversification – A single ETF provides access to a wide range of securities, reducing reliance on any one investment.

• Professional Oversight – Depending on the type, ETFs may be managed by experienced portfolio managers.

• Accessibility – Anyone with a brokerage account can buy or sell ETF shares.

• Liquidity – ETFs trade on an exchange throughout the day, allowing for flexibility in both short- and long-term strategies.