An exchange traded fund (ETF) is an investment fund traded on stock exchanges, much like stock. An ETF holds assets such as stocks, commodities or bonds, and trades close to its net asset value over the course of the trading day. Most ETF track an index, such as stock index or bond index.ETFs may be attractive as investments because of their low costs, tax efficiency, and stock-like features. ETFs are the most popular type of exchange traded product.

TYPES OF ETF

• Index ETF
• Stock ETF
• Bond ETF
• Commodity ETF
• Currency ETF

INVESTMENT USES

• Lower costs
• Buying and selling flexibility
• Tax efficiency
• Market exposure and diversification
• Transparency

Why are ETFs so porpular?

• Liquidity
  ETFs offer two sources of liquidity
  Traditional liquidity measured by secondary market trading volume
  Multi dealer model boosts the liquidity of iShares ETFs
• Diversification
  ETFs provide immediate exposure to a basket or group of securities for instant diversification.
  Broad range of asset classes including equities, bonds, commodities, investment themes, etc
• Flexibility
  ETFs are listed on exchanges and can be traded an any time the market is open
  Pricing is continuous throughout the day
• Cost effectiveness
  ETFs offer a cost-effective route to diversified market exposure