Understand investment products, market mechanics, indicators and research terminology. Each entry includes an explanation, example, cautions and related learning.
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An exchange-traded fund is an investment fund whose units are listed and traded on a stock exchange throughout the trading day, usually tracking an index, a sector or a basket of assets. It combines a pooled portfolio with the ability to buy and sell like a share.
The expense ratio is a fund's annual operating costs, such as management, administration and custody fees, expressed as a percentage of its average net assets. It is deducted from the fund's assets, so it lowers returns without appearing as a separate bill.