Unlike mutual funds, ETFs trade like common stocks on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.

Each fund follows a certain market strategy or index and is designed to either suit the hedging needs of a specific financial institution or to be a low-risk option for investors. ETFs are created by financial bodies using a team of experts who tailor each fund to meet its specific goal. The assets of the fund are owned by its creators, and just like stocks, dividends can be distributed to investors from time to time. ETFs are usually considered to be long-term investment tools, as they are geared towards low-risk, and are designed to yield steady profits over time.