DavidJohnson
Wed Jun 05 2024
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7 answers
1728
Why is an ETF not a derivative?
Could you please explain why an Exchange-Traded Fund (ETF) is not considered a derivative? I'm curious to understand the fundamental differences between the two financial instruments. What are the key characteristics that distinguish an ETF from a derivative? Is it because ETFs are passively managed and track an underlying asset or index, whereas derivatives are contracts based on the value of another asset? Or are there other reasons? I'm interested in learning more about this distinction.
