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ETFs are passively managed Mutual Funds, which are Exchange Traded. An individual ETF could distinguish itself by tracking a major Equity Index (S&P 500), a Sector, a Market Cap range or an Investment Style.

An ETF is a pooled investment vehicle or Mutual Fund, which is actively traded on a Stock Exchange. Where ETFs and Mutual Funds differ is that an ETF is passively managed, designed to track an index, with lower Management Fees, higher trading activity and liquidity for some EFTs is immediate. An ETF’s tracking error to the reference benchmark will be minimal and would be because of the Management Fee and Trading Fees. ETFs are varied in their asset mix and could be based on a major equity index. The QQQ is based on the NASDAQ Composite, an Equity market Sector Index or a specific Investment Strategy. The more specialised the EFT, the more likely that it will have less positions and higher volatility compared to a Major Index ETF.


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Warren William

Meet the author behind Smartest-Data. Warren William has a career in Finance and Investments extending over 35 years, both on the Buy Side and Sell Side. His most recent roles include, developing Institutional Risk Management Programs for managing Equity and Fixed Income Risk.  Prior to this Warren William work in Alternative Investments, in Investment Management and as a Buy Side Equity Analyst. Warren William brings a wealth of knowledge and expertise to the table, providing in-depth analysis and commentary on the latest trends in the Stock Markets. Contact information: or Telegram +393339034488

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