What Is an Exchange Traded Fund?

Video Transcript

"This is financial adviser Patrick Munro talking about what is an exchange traded fund. An exchange traded fund is a fund that is known as an ETF for short and these exchanges are large blocks of an activity. For instance, an exchange that's most notably noted before ETF came along was the S&P 500. That's blue chip for short and the S&P 500 is the largest 500 corporations in America. The NASDAQ is another exchange, those are more tech related companies and then of course there are exchange traded funds which are exotic type funds... for instance in the area of gold, you would have ten or twelve or fifteen mine companies all wrapped up in one particular fund. So, if you're into gold, you can put your money into that ETF and have a piece really of all the fortunes in those ten companies going forward. They have it for every commodity including oil, silver, platinum, you name it. ETFs are a new way to trade the market and again be aware of your risk tolerance. This is Patrick Munro, financial adviser talking about ETFs."