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What is an exchange-traded fund (ETF)?

An exchange-traded fund (ETF) is a type of pooled investment security that operates much like a mutual fund. Typically, ETFs will track a particular index, sector, commodity, or other assets, but unlike mutual funds, ETFs can be purchased or sold on a stock exchange the same way that a regular stock can.

What are emerging market ETFs?

The underlying indexes tracked by emerging market ETFs vary from one fund manager to another, but all should be passively managed and contain equities from multiple countries unless otherwise stated. An emerging market ETF is an exchange-traded fund that invests in the stocks of emerging market economies.

Is an ETF a mutual fund?

It’s a mutual fund in every aspect … except one. And that’s a big one, which is hinted at in its very name: exchange-traded funds. You buy shares in an ETF directly from any brokerage account. Just like you buy shares in a stock, you can enter a buy order in your Schwab or Fidelity account and buy any ETF you want.

How are ETFs traded?

ETFs are traded in the markets during regular hours just like stocks are. Mutual funds can be redeemed only at the end of a trading day.

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