exchange-traded fund (etf) 101

An exchange traded fund (ETF) is like buying several shares in numerous companies that trade on an exchange.

An ETF can be bought just like stock.

The ETF share prices go up and down all day as the ETF is bought and sold.

ETFs can contain all types of investments including stocks, commodities, or bonds.

ETFs generally offer low expense ratios and fewer broker commissions when compared to buying the stocks individually.

When choosing an ETF, there are many options.

You can either chose to invest in:

• Sector ETFs

  Sector ETF, means is investing in companies within specific sectors, such as the health care, financial or industrial sectors, technology, travel etc.

• International ETFs

  An International ETF invests mainly in foreign-based securities. The focus can be regional, global, or on a specific country,

• Bond ETFs

  Bond ETF's usually consists of only the largest and most liquid bonds. This allows the bond ETF to emulate an index. Bond ETFs also pay out interest with a monthly dividend.

• Commodity ETFs

  A commodity ETF invests in physical goods such as agricultural commodities, precious metals, and natural resources.

Benefit of buying an ETF is that it allows to diversify your portfolio. You can invest in several companies vs investing in only one company when you buy an ETF share.