Exchange-Traded Funds and Products

The expense ratio measures what percentage of a fund’s assets are used to pay for the operating and administrative expenses of that fund, which reduce an investor’s return. The expense ratio of a particular ETF may be higher or lower than the guidelines noted in the chart above. You should carefully review the prospectus for the ETFs expense ratio. ETFs may be appropriate for many kinds of investors, especially the traditional, more broadly diversified and passively managed ETFs that provide exposure to multiple securities and sectors. The strategies discussed are strictly for illustrative and educational purposes and are not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any strategies discussed will be effective.

Consult a tax professional if you need clarification of tax implications before making an investment. The assets held by an ETF might pay what are exchange traded funds interest or dividends, which may be either reinvested or paid periodically to shareholders, depending on the way the ETF is structured.

Index ETFs

Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained visiting the iShares ETF and BlackRock Mutual Fund prospectus pages. The table below illustrates some of the differences among active and index mutual funds, ETFs and stocks. Mutual fund investors may pay transaction fees, which can include sales charges or redemption fees.

Before acting on any recommendation in this material, you should consider whether it is in your best interest based on your particular circumstances and, if necessary, seek professional advice. No minimum investment — Most mutual funds require https://www.bigshotrading.info/ a minimum investment, whereas an investor can usually purchase as few shares of most ETFs as desired. This arrangement follows the typical mutual fund structure in that new shares are continually offered and redeemed by the investment company.

How to invest in ETFs

Additional information is available in our Client Relationship Summary . Many sector ETFs, for instance, will tend to be more volatile than an ETF that tracks the broader market.