Are listed on the various stock exchanges and trade just like a stock
They are priced continuously throughout the trading day
ETFs can be sold short
You pay a commission when buying and selling just like when buying an individual stock.
ETFs offer all of the advantages of a mutual fund without some of the disadvantages:
Diversification:
A typical ETF will hold many individual stocks within its portfolio.
Professional Management:
ETFs are managed by highly professional investment specialist that make the buy and sell decisions for their individual ETF portfolios.
Economies of Scale:
ETFs take advantage of their size to minimize transaction cost associated with buying and selling individual stocks within their respective portfolios.
Advantages over Mutual Funds:
With ETFs there are no minimum holding periods and no early redemption fees.
Types of Exchange Traded Funds:
Growth oriented (Smaller growth stocks)
Value oriented (Large cap value stocks)
Income oriented (Bond funds or dividend paying stocks)
Foreign exchange (Forex related vs. the U.S. Dollar)
Specific market segments (energy, healthcare, consumer products, etc.)
Precious Metals (Gold, silver, etc.)
Rebound Trading Systems
With so many diverse ETFs to choose from it is important to have a sound system for building a portfolio of Exchange Traded Funds. The Rebound trading systems I have developed consistently out-perform the S&P 500 by a wide margin.
