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Interactive Options Course
Lesson 1 of 3
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An ETF is a 1940 Act exchange-traded investment wrapper that tracks a basket of securities very similar to a mutual fund, but it is traded on an exchange. While most ETFs are designed to replicate and track an index, some are not tracking an index and are actively managed. ETF investors do not interact directly with the ETF exchange company. They trade ETF shares on an exchange.
An index is a hypothetical portfolio of investment holdings representing a segment of the financial markets. They are typically a benchmark index such as the:
S&P 500
ACSI
MSCI World
DAX
Russell 2000 Small-Cap
You cannot invest directly into an index. You must use some other sort of vehicle that tracks that index, and that is initially how ETFs were designed. Today, most ETFs still track an index.
The difference between the ETF and the index in a perfect world is called “tracking error,” and the tracking error difference between the return of the index and the ETF will be that fund’s expense ratio.
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Investors should carefully consider the investment objectives, risks, charges and expenses of the Funds before investing. U.S. investors only: To obtain a prospectus containing this and other important information, please call 866.909.WISE (9473) or click here to view or download a prospectus online. Read the prospectus carefully before you invest. There are risks involved with investing, including the possible loss of principal. Past performance does not guarantee future results.
You cannot invest directly in an index.
Foreign investing involves currency, political and economic risk. Funds focusing on a single country, sector and/or funds that emphasize investments in smaller companies may experience greater price volatility. Investments in emerging markets, real estate, currency, fixed income and alternative investments include additional risks. Due to the investment strategy of certain Funds, they may make higher capital gain distributions than other ETFs. Please see prospectus for discussion of risks.
WisdomTree Funds are distributed by Foreside Fund Services, LLC, in the U.S. only.
Interactive Advisors offers two portfolios powered by WisdomTree: the WisdomTree Aggressive and WisdomTree Moderately Aggressive with Alts portfolios.
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This material is from WisdomTree U.S. and is being posted with its permission. The views expressed in this material are solely those of the author and/or WisdomTree U.S. and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
Why bother with Mutual Funds? ETFs win on everything……….according to this presentation. Less bias please
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