The textbook definition of an ETF, or Exchange Traded Fund, is a low-cost fund that tracks an index and trades like a stock. True statement, but that definition hardly captures the possibilities of this investment vehicle. The ETF has tremendous advantages over similar products such as stocks and mutual funds.

ETFs provide diversification you can’t get with a single stock. Investing in an entire sector decreases volatility and insulates your risk of quick and dramatic draw downs. ETFs exercise even more of an advantage over mutual funds including: transparency, real-time pricing, liquidity, and tax benefits.

ETFs also provide exposure to asset classes which, until recently, were off limits to the average investor. Inverse, Leveraged, Commodities, Emerging Markets, Frontier Markets, Precious Metals, Currencies, Bonds, and just about any sector of the US Economy.

The bottom line is there is no longer a reason why you shouldn’t have a balanced portfolio. Keep reading, learn more and use ETF Port resources to find the ETFs best for your portfolio.

Top ETF Port Frequently Asked Questions

What's the difference between ETFs and closed-end funds?

Closed-end funds have a set number of shares from an initial public offering and do not issue any new shares as demand grows. Closed-end funds can issue preferred shares to generate higher income for common shareholders. The most common index ETF cannot issue preferred shares or use leverage to generate higher gains for common stock holders, but there are some closed-end ETFs.