What Are ETFs? Infograph Desktop

The Complete Guide to

ETFs

(Exchange-Traded Funds, Not Electronic Fund Transfers!)

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ETFs are sold only by prospectus. Please consider the charges, risks, expenses, and investment objectives carefully before investing. A prospectus containing this and other information about the investment company can be obtained from your financial professional. Read it carefully before you invest or send money.

what's an

ETF?

Think of it as a shopping cart filled with investments that trade like a stock1One ETF share = ownership in a basket of stocks, bonds, or other assets1 You can buy or sell it anytime the market is open!

Exchange-traded funds (ETFs) are subject to the market and the risks of their underlying securities. Some ETFs may involve international risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to specific countries, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Furthermore, ETFs that focus on a small universe of securities may be subject to more market volatility, as well as the specific risks that accompany the relevant sector, region, or group. An ETF's trading price may be at a premium or discount to the underlying securities' net asset value (NAV).

the

ETF

revolution

Global ETF assets reached $11 trillion in 20232 60% of U.S. investors are considering buying ETFs in the next year3

how do

ETFs

work?

CREATION

TRACKING

Financial institutions create ETF shares based on a specific investment goal1

ETFs follow their underlying investments throughout the day2

TRANSPARENCY

TRADING

You can see what's in your ETF at any time2

Shares trade on exchanges just like stocks1

why people love

ETFs

Instant Diversification1 Spread risk across many investments Low Costs Average expense ratio: 0.16% for stock ETFs2

Diversification is an approach to help manage, but not eliminate, investment risk in the event that security prices decline.

Popular types of

ETFs

STOCK ETFs

SECTOR ETFs

Focus on specific industries3

Track market indexes3

BOND ETFs

INTERNATIONAL ETFs

Hold government, corporate, or municipal bonds3

Invest in foreign markets3

Exchange-traded funds (ETFs) are subject to the market and the risks of their underlying securities. Some ETFs may involve international risks, which include differences in financial reporting standards, currency exchange rates, political risks unique to specific countries, foreign taxes and regulations, and the potential for illiquid markets. These factors may result in greater share price volatility. Furthermore, ETFs that focus on a small universe of securities may be subject to more market volatility, as well as the specific risks that accompany the relevant sector, region, or group. An ETF's trading price may be at a premium or discount to the underlying securities' net asset value (NAV). Past performance does not guarantee future results. The return and principal value of an investment will fluctuate as market conditions change. And shares, when sold, may be worth more or less than their original cost.

Sources: 1. SmartAsset.com, October 10, 2024 2. Bankrate.com, March 28, 2024 3. Investopedia.com, January 30, 2025