Exchange-Traded Funds (ETFs)
Benefits of Exchange-Traded Funds (ETFs)
Exchange-traded funds (ETFs) are index funds or trusts that are listed on an exchange and can be traded like a single stock. The benefits of these low-expense, passively managed portfolios include:
- Trading flexibility. Since ETFs trade on the stock exchanges, they can be bought and sold throughout the day. Exchange-traded funds also let you use limit and stop-loss orders, buy on margin, and sell short.
- Diversity. A single investment in an exchange-traded fund gives you a diversified portfolio of stocks. They can be especially helpful if you're looking for diversified exposure to certain industries, sectors, geographic regions or investment themes.
- Tax efficiency. Exchange-traded funds minimize capital gains due to their in-kind creation and redemption process.
- Transparency. While a closed-end fund or a mutual fund typically publishes its holdings only semi-annually or quarterly, ETFs publish them daily.
How We Can Help You Invest in Exchange Traded Funds (ETFs)
Contact a Wachovia Securities Financial Advisor to learn more about the advantages and disadvantages of investing in exchange-traded funds (ETFs) and to discuss whether ETFs fit within your overall investment portfolio.