The Appeal of Etfs

Abstract

ETFs represent an important and unique financial product category. They are a valuable addition to securities markets and it is likely there will be continued growth in the number of ETFs available. They offer many unique features including several distinct trading advantages. In addition, this article discusses market liquidity, spreads, market depth and market timing. It also looks at the unique perspective of the individual investor and applications of ETFs. The article concludes with an in-depth discussion of ETFs and tracking error.