Reference: Exchange-Traded Funds
Exchange-traded funds (or ETFs) are a relatively new type
of security instrument that exhibits some qualities of a stock and some
qualities of a mutual fund. Just like mutual funds, ETFs represent a
collection of underlying securities or stocks.
A stock market index is a listing of stocks, and a
statistic reflecting the composite value of its components. The concept
may be extended well beyond an exchange. Indices are also a common
basis for a related type of investment, the exchange-traded fund or
ETF. Unlike an index fund, which is priced daily, an ETF is priced
continuously, is optionable, and can be sold short.
A Closed-End fund is a mutual fund one with a constant
number of shares. Thus they are usually considered a subset of the
ETFs, or exchange-traded funds, although there are closed-end funds
that don't trade on any exchange.
The expense ratio of a stock or asset fund is the total
percentage of fund assets used for administrative, management,
advertising (12b-1), and all other expenses. Expense ratios are
important to consider when choosing a fund, as they can significantly
affect returns.
The Russell Indexes (note that Russell uses "Indexes"
rather than "Indices") are a set of stock indexes of listed US
companies. The indexes are rebalanced, or "reconstituted", once each
year, on the last Friday in June.
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