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How do ETFs work?
theshortstack
Posts: 76 Forumite
I'm not sure I totally understand what an ETF is and how they work?
As far as I know at the moment, an ETF is very much like a wrapper itself in as far as it can hold stocks, commodities or bonds. It is also traded on the market just like a common stock.
If that's the case then, is a Bond ETF still as low risk as a normal Bond fund? Surely it can't be if it's price is able to rise and fall just like any stock.
Thanks very much
As far as I know at the moment, an ETF is very much like a wrapper itself in as far as it can hold stocks, commodities or bonds. It is also traded on the market just like a common stock.
If that's the case then, is a Bond ETF still as low risk as a normal Bond fund? Surely it can't be if it's price is able to rise and fall just like any stock.
Thanks very much
0
Comments
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Let Wikipedia be your friend
- link: http://en.wikipedia.org/wiki/Exchange-traded_fund “It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0
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