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What Are ETFs? Infograph Desktop

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Created on February 27, 2025

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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.

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ETFs

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

The Complete Guide to

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).
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!

ETF?

what's an

revolution

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

ETF

the

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

ETFs follow their underlying investments throughout the day2

Shares trade on exchanges just like stocks1

Financial institutions create ETF shares based on a specific investment goal1

TRACKING
TRANSPARENCY
CREATION
TRADING

work?

ETFs

how do

Diversification is an approach to help manage, but not eliminate, investment risk in the event that security prices decline.
Instant Diversification1 Spread risk across many investments Low Costs Average expense ratio: 0.16% for stock ETFs2

ETFs

why people love

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.

Invest in foreign markets3

Focus on specific industries3

Hold government, corporate, or municipal bonds3

Track market indexes3

SECTOR ETFs
INTERNATIONAL ETFs
STOCK ETFs
BOND ETFs

ETFs

Popular types of

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