EXCHANGE TRADED FUNDS :

Exchange traded funds (ETFs) are a new variety of mutual fund that was first introduced 1993. ETFs are sometimes described as more “tax efficient” than traditional equity mutual funds, since in recent years, some large ETFs have made smaller distributions of realized and taxable capital gains than most mutual funds.

In short, they are similar to index mutual funds but are traded more like a stock. As their name implies, Exchange Traded Funds represent a basket of securities that are traded on an exchange. Gold ETFs are most popular among other ETFs, physical gold is kept as underlying security. As with all investment products, exchange traded funds have their share of advantages and disadvantages.

Advantages of Exchagne Traded Funds	Disadvantages of Exchagne Traded Funds
ETFs can be bought and sold throughout the trading day, allowing intraday trading – which is rare with mutual funds.	Commissions – like stocks, trading exchange traded funds are an extra cost.
Traders have the ability to short or buy ETFs on margin.	Only institutions and the extremely wealthy can deal directly with ETF. Companies must buy through a broker.
Low annual expenses rival the cheapest mutual funds.	Unlike mutual funds, ETFs don’t necessarily trade at the net asset values of their underlying holdings, meaning an ETF could potentially trade above or below the value of the underlying portfolios.