ETFs

The “creation/redemption” mechanism is crucial to understanding how ETFs work. It is the “secret sauce” that allows ETFs to be less expensive, more transparent, and tax efficient than typical mutual funds by allowing them to get market exposure. What is the process for creating and redeeming ETF units? Buying all of the underlying securities and […]

The volatility index, also known as the VIX, is a standardized measure of market volatility that is frequently used to gauge investor panic. ETFs that track the VIX can be traded by investors to speculate on or hedge against future market movements. Before adding the VIX and its ETFs to your portfolio, it’s important to

An actively managed ETF is a type of exchange-traded fund in which the underlying portfolio allocation is decided by a manager or team, rather than following a passive investment strategy. Although an actively managed ETF will have a benchmark index, managers can adjust sector allocations, make market-time trades, and diverge from the index as they

The ETF or fund business deducts investment management fees from exchange-traded funds (ETFs) and mutual funds, and daily changes are made to the fund’s net asset value (NAV). Because the fund company processes these fees in-house, investors don’t see them on their accounts. Investors should be concerned about the total management expense ratio (MER), which

With different share classes and expenses, mutual funds have a more complex structure than ETFs. ETFs appeal to investors because they track market indexes, whereas mutual funds appeal to investors because they offer a diverse range of actively managed funds. ETFs trade continuously throughout the day, whereas mutual fund trades close at the end of

The annual fee that all funds charge shareholders for keeping the fund is known as the MER, or expense ratio. It captures the management fee, operating expenditures, and taxes incurred by a fund on an annual basis and is expressed as a percentage of assets under management (AUM). Fund valuation costs, audit and legal fees,

An exchange traded fund (ETF) is a collection of securities that trade like stocks on a stock exchange. Unlike mutual funds, which only trade once a day after the market closes, ETF share prices fluctuate throughout the day as the ETF is purchased and sold. How does an ETF fund generate revenue? An ETF can

Liquidity is the most important component in any ETF, stock, or other publicly traded asset. When you buy anything, liquidity means that there is enough trading interest that you can get out of it relatively fast without altering the price. Depending on the size of your position in relation to the usual trading volume, getting

If the ETF sells an investment for more than it paid, it will get capital gains dividends. How much do ETF managers get paid? In the United States, the national average compensation for an ETF Portfolio Manager is $106,931. To view ETF Portfolio Manager salaries in your area, filter by location. How are ETFs compensated?

Although most exchange traded funds (ETFs) are associated with index-tracking and growth investing, many of them also provide income through the ownership of dividend-paying stocks. When they do, they collect and distribute the quarterly dividend payments to ETF shareholders. At the discretion of the fund’s management, dividends can be delivered in one of two ways: