An ETF is a passive investment designed to track a certain index. This means they are cheaper than actively managed funds, like mutual funds. ETFs are traded like stocks. Because they hold multiple securities in one share, they add instant diversification to your portfolio.
ETFs are subject to risk similar to those of their underlying securities, including, but not limited to, market, investment, sector, or industry risks, and those regarding short-selling and margin account maintenance. Some ETFs may involve international risk, currency risk, commodity risk, leverage risk, credit risk, and interest rate risk. Performance may be affected by risks associated with nondiversification, including investments in specific countries or sectors.
Additional risks may also include, but are not limited to, investments in foreign securities, especially emerging markets, real estate investment trusts (REITs), fixed income, small-capitalization securities, and commodities. Each individual investor should consider these risks carefully before investing in a particular security or strategy. Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Unlike mutual funds, shares of ETFs are not individually redeemable directly with the ETF. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).
Before you invest in an ETF or send money, you should read the prospectus of the ETF carefully and consider the investment objectives, risks, charges, and expenses for the ETF. You can receive a prospectus for each ETF by e-mailing Axos Invest, Inc., at email@example.com.