What is an exchange traded fund?

An exchange-traded fund (ETF) is a type of security that involves a collection of securities—such as stocks—that often tracks an underlying index, although they can invest in any number of industry sectors or use various strategies. ETFs are in many ways similar to mutual funds; however, they are listed on exchanges and ETF shares trade throughout the day just like ordinary stock.  At Vision Capital, we typically use low-cost index ETFs to mimic the asset classes we use in our active asset allocation strategy.