Definition of Exchange Traded Funds

Video Transcript

"This is Patrick Munro talking about the definition of exchange traded funds. As a Financial Adviser, I see a lot of investments that come across my desk and exchange traded funds is one of the latest renditions of sort of the hybrid product that's out there. It has risk management carried underneath it because instead of investing in specific individual stocks or mutual funds, it's invested in the wider index. Index is being commonly known as the SNP 500, the Nasdaq 100, the Russell 2000, the Wilshire 5000. These are bundles of stocks, well known stocks and there's only a certain percentage of them in the index. So it makes for a control basis that's very easy to work with. Exchange traded funds have also been package up to represent certain industry sectors such as gold exchange traded funds which have done very well recently with precious metals rising in this inflation area environment. It's a great pry for individuals that wish to specialize in their investment needs. This is Patrick Munro discussing the nature of exchange traded funds."