You may already own mutual funds.
But you also might want to consider another type of fund - an exchange-traded fund, or ETF.
Like mutual funds, ETFs can own a variety of investments, such as stocks, bonds, and other securities.
Unlike mutual funds, ETFs are traded throughout the day, similar to individual stocks.
For some investors, the main attraction of ETFs is their tax advantages.
Because many ETFs simply track a particular index, such as the S&P 500, they don’t do much buying or selling, generating fewer capital gains taxes to pass along to investors.
And since less active management is needed to run many ETFs, their costs and fees may be lower than those of many mutual funds.
ETFs do carry some risk.
Your principal and investment returns will fluctuate in value, so, when you redeem your ETF, it may be worth more or less than your original investment.
Also, some ETFs may be more difficult to sell than other investments.
A financial professional can evaluate your situation and help you determine if ETFs are suitable for your needs.
They may represent another opportunity to help you move toward your goals.
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor John Dickerson. Member SIPC.
