Stocktalk - ETFs (Part 1)

This video takes a closer look into exchange traded funds, or ETFs.  ETFs are passively managed instruments which track a range of market indices around the world.  They are essentially hybrid securities, combining characteristics of both stocks and funds.  They are open ended and continuously quoted on the stock exchange.

Most ETFs are index trackers with a wide range of options.  He provides an overview of the different sectors that an ETF can mirror.  For example, an ETF may be created to track an index, or maybe a unique sector such as property, water, infrastructure, private equity, bonds, or even commodities such as gold and silver. 

ETFs allows the investor to take a top down approach to investing in the right asset classes with the right amounts.  It is a marriage between an open ended fund and a trading share.  As opposed to some mutual funds, ETFs can offer much lower fee structures, higher amounts of liquidity, and much smaller size requirements.  You can be as little as one share of an ETF on the exchange.