What are ETFs?

An exchange-traded fund (ETF) is a security that usually tracks an index, a commodity, or a basket of assets—much like an index fund—but trades like a stock on an exchange. Most ETFs track fairly closely to the indexes that they follow, such as the S&P 500 or the Dow Jones Industrial Average. ETFs are bought and sold like stocks throughout the day, and therefore experience continually changing prices. Betterment uses ETFs in both our stock and bond portfolios because of the liquidity, diversification, and low management fees. For more information on the ETFs you are invested in through Betterment, please visit our portfolio page.