Understanding ETFs


Build a solid foundation of knowledge about ExchangeTraded Funds (ETFs).

The three tracks in this section are designed to give you a clear understanding of the most important topics about Exchange Traded Funds (ETFs) — from their structure and benefits to ETF investing, to strategies for using them in portfolios, to the nuances of investing with fixed income, commodity, and international ETFs.

What is an ETF?Basic ETF Concepts

This section provides a foundational explanation of the origin and structure of ETFs, as well as important things to know about index investing.

What is an ETF?  >>

Sector ETFsTypes of ETFs

This section provides an explanation of the range of ETF options and how they can help you build diversified portfolios with targeted exposure to specific asset classes.

Sector ETFs >>

Advanced ETF ConceptsAdvanced ETF Concepts

This section addresses more complex topics surrounding ETF investing, including modularity, liquidity, and how portfolio managers maintain control over your asset allocation.

How to Evaluate an  ETF >>


Rich Dad Poor Son

By Perry Mossaed | August 18th, 2016 08:08 PM EST

Last month McKinsey and Company released their 112-page report on falling incomes in advanced economies. The report concluded with a number of disturbing macro trends that demonstrate just how much the socio-economic landscape has, and continues, to change. Index Strategy … Continue reading

How to Invest in Pokemon

By Perry Mossaed | August 5th, 2016 08:08 PM EST

Today, we’re taking a look at the phenomenon that is – Pokemon Go and how to invest in Pokemon. Launched on July 6th, 2016, Pokemon Go is a gaming app for your android or IOS device that has now topped Twitter … Continue reading

The size of the U.S. ETF Market (monthly update)

By ISA Education | July 1st, 2013 06:07 AM EST

The combined assets of the nation’s exchange-traded funds (ETFs) were $1.481 trillion in May 2013, according to the Investment Company Institute. The Institute’s monthly statistical collection also includes the value of shares issued and redeemed by exchange-traded funds. Statistics contained … Continue reading

5 risks that every ETF investor should know about

By Perry Mossaed | October 11th, 2012 05:10 PM EST

In order to understand the risks associated with exchange traded funds (ETF’s), we have to understand what an ETF is. Luckily, it’s just like the acronym makes it out to be. E – Exchange (i.e. the instrument is listed on … Continue reading

Why Dynamic Asset Allocation Might be Right for You

By Perry Mossaed | October 3rd, 2012 12:10 PM EST

What do nearly all investors have in common? They see their portfolio values move up and down continuously. Ideally, when our investment accounts take losses, they’d shrink incrementally, and when they show positive returns, they’d move by leaps and bounds. … Continue reading

ETFs vs. Mutual Funds

By ISA Education | September 1st, 2012 08:09 AM EST

ETFs vs. Mutual Funds: Similarities Mutual funds and exchange-traded funds (ETFs) share similarities and can serve similar purposes for investors. Both, for example, can provide the basic building blocks of investors’ portfolios. An ETF is similar to a mutual fund … Continue reading

What is an Exchange Traded Fund (ETF)?

By ISA Education | May 31st, 2012 10:05 PM EST

“What is an Exchange Traded Fund”?, is a question being asked frequently in the modern investing era.  An exchange traded fund (ETF) is an investment vehicle that combines attractive features of traditional mutual funds and individual stocks. Like mutual funds, … Continue reading

ETF Benefits include their low cost and the best features of stocks and mutual funds

By ISA Education | May 30th, 2012 04:05 PM EST

The main  ETF Benefits are their low cost, diversification, flexibility, tax efficiency, transparency, and liquidity.  Investors in ETFs can access a wide variety of markets, and seek profits during advancing or declining markets, all at a reduced cost compared with mutual … Continue reading

ETFs versus stocks the growing divide

By ISA Education | May 28th, 2012 07:05 PM EST

ETFs versus stocks or mutual funds  are rapidly becoming the preferred choice for building investment portfolios. An objective comparison between ETFs and other investment vehicles reveals why. ETFs versus stocks offer better diversification (like mutual funds) at a great cost savings. … Continue reading

ETFs vs. ETNs

By ISA Education | May 26th, 2012 01:05 AM EST

Exchange traded notes (ETNs) and exchange traded funds (ETFs) offer similar benefits but have different structures. ETNs are similar to ETFs, however there are several differences that investors should be aware of. Neither vehicle is superior in every case and … Continue reading


What ETFs Exist?

By ISA Education | July 1st, 2012 09:07 PM EST

There are currently 1,212 ETFs and exchange-traded notes available in the U.S., with many more listed overseas. Through ETFs, investors can gain access to almost any asset class or investment category around the world, including many that were previously inaccessible, … Continue reading

International ETFs – Investing in global growth

By James McDonald | June 30th, 2012 01:06 PM EST

While most U.S. investors tend to focus their portfolios around domestic securities, more than 75% of global economic output and over half of the world’s equity market capitalization comes from countries outside of the U.S.* International ETFs can provide access … Continue reading

Sector ETFs

By ISA Education | May 31st, 2012 03:05 AM EST

Sector ETFs enable equity investment approaches that invest by industry, or sector. Often, companies in the same sector have similar characteristics and risk profiles, which can cause their stock prices to move together in response to prevailing economic conditions.   At … Continue reading

Fixed Income ETFs

By ISA Education | May 30th, 2012 06:05 PM EST

The diversity of fixed income ETFs lends itself to a wide range of investment strategy applications for bond investors. Building multi-sector portfolios with fixed income ETFs (for example including a mix of Treasuries, corporates, municipals, and securitized bonds) allows for diversification of both risk … Continue reading

Inverse ETFs – How they work and their benefits versus risks

By ISA Education | May 26th, 2012 07:05 PM EST

Inverse ETFs are exchange-traded funds that are designed to gain in value from a decline in the value of an underlying benchmark.  In this way Inverse ETFs enable an investor to profit from falling sector, bond, commodity or currency prices. Investing … Continue reading

Commodity ETFs

By ISA Education | May 28th, 2011 06:05 PM EST

The scope of options for commodity ETFs allows for access to multiple, global, investment themes. ETFs and ETNs provide the most efficient means for investors to capitalize on global trends that consume natural resources.  Nearly every commodity type is available … Continue reading

Currency ETFs

By ISA Education | May 27th, 2011 06:05 PM EST

 As the largest and most liquid marketplace in the world, the foreign exchange market offers investors an around the clock investment opportunity to index entire economies Currency investments provide noncorrelated returns that can help diversify cash allocations, hedge international exposure, … Continue reading


Why Dynamic Asset Allocation Might be Right for You

By Perry Mossaed | October 3rd, 2012 12:10 PM EST

What do nearly all investors have in common? They see their portfolio values move up and down continuously. Ideally, when our investment accounts take losses, they’d shrink incrementally, and when they show positive returns, they’d move by leaps and bounds. … Continue reading

ETFs and Market Volatility

By ISA Education | May 30th, 2012 11:05 PM EST

ETFs have been blamed for driving stock market volatility to unprecedented extremes in recent years. That charge, however, breaks down under an examination of the data. Analysis by Rochelle Antoniewicz of the investment company institute shows that 1) Recent levels of volatility … Continue reading

ETFs and Index Strategies

By ISA Education | May 29th, 2012 07:05 PM EST

The low costs, transparency, liquidity, and better tax efficiency are some of the major reasons ETFs are being chosen over mutual funds. Common portfolio objectives which benefit the most from ETFs and index strategies include: Low cost, low maintenance asset … Continue reading

ETF product structure types, advantages vs. disadvantages

By ISA Education | May 28th, 2012 09:05 PM EST

ETF Product Structure and related exchange-traded products (ETPs) can use various types of structures. Each structure has its own unique advantages and disadvantages. ETF product structure of open end funds ETF product structure among the vast majority of traditional approaches … Continue reading

Tax Treatment of Different ETFs

By ISA Education | May 27th, 2012 01:05 AM EST

ETFs are tax-efficient as a result of the creation/redemption process which allows an investor to pay most of his or her capital gains upon final sale of the investment. However, not all ETFs face the same tax treatment: Regular ETFs … Continue reading

Leveraged ETFs – Best Uses Versus Limitations

By ISA Education | May 26th, 2012 07:05 PM EST

Leveraged ETFs seek to magnify gains and to provide above market performance to various stock, bond and commodity indexes on a daily basis.  Although Leveraged ETFs can provide magnified returns, their use requires additional precautions when compared to  unleveraged ETFs. … Continue reading

How an ETFs price is determined

By ISA Education | May 25th, 2012 01:05 AM EST

The price of an ETF share on a stock exchange is influenced by the forces of supply and demand. While imbalances in supply and demand can cause the price of an ETF share to deviate from its underlying value (i.e., … Continue reading

Understanding the True Costs of ETFs

By ISA Education | May 31st, 2011 06:05 PM EST

In general, ETFs are cheaper than mutual funds, but that doesn’t mean they’re free. In fact, some of the costs associated with ETFs don’t exist with traditional mutual funds. Before you buy, it pays to understand the true costs and … Continue reading

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Sources: Index Strategy Advisors, Inc.. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of its stamped publication date, and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by Index Strategy Advisors to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. Past performance is no guarantee of future results. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader. Investment involves risks. International investing involves additional risks, including risks related to foreign currency, limited liquidity, less government regulation and the possibility of substantial volatility due to adverse political, economic or other developments. The two main risks related to fixed income investing are interest rate risk and credit risk. Typically, when interest rates rise, there is a corresponding decline in the market value of bonds. Credit risk refers to the possibility that the issuer of the bond will not be able to make principal and interest payments. Index performance is shown for illustrative purposes only. You cannot invest directly in an index.