Finance Wanted.

By Jayne S Rupple

Exchange traded funds are becoming more popular every day. Many of the large investing web sites have whole sections dedicated to the topic of exchange traded funds (or ETFs as they are commonly labelled.) Why all the attention to this new class of investments.

Some Advantages of ETFs

The most widely touted advantage of ETFs is that they generally are not actively managed, and so they tend to have extremely low expenses, since they don't need to compensate a fund manager. For those looking to invest in a fund that primarily tracks on of the major indices, this is a great way to get the same returns with no lost performance from paying fees.

Exchange traded funds are not offered through a mutual fund company, but instead are traded on the stock exchanges. This has some advantages and disadvantages. One advantage is that they can be traded any time during the trading sessions of the stock exchanges, so you don't have to wait for the market close to get in or out of a fund. One disadvantage to this is that you get a bid/ ask spread on a trade, that is the price to buy or the price to sell are not exactly the same. This is known as slippage, and can have noticeably negative impact on your returns if you are trading in and out of the market frequently.

Finally, there is a large variety of fund investments. You can invest in the major indices, or you can pick a smaller, more targeted sector, like the financial stocks or real estate stocks. You can target a region of the world, or a specific country like Germany or China. For a truly diversified portfolio, you can even allocate some of your funds to commodities like gold or silver, as there are funds that track the prices of these as well.

We provide information on the best ways to manage your exchange traded fund investments, including finding the best ETFs. Get more information regarding exchange traded funds.