State-Based Exchange-Traded Funds
by Cara Scatizzi
Exchange-traded funds (ETFs) are continuing to prove themselves as ever-present and almost chameleon-like in their ability to take on many new forms as a perceived need arises. The latest additions to the ETF world are state-based ETFs.
In this article
- How It Works
- Types
- How to Invest
- Investor Suitability
- Tax Implications
- The Pros
- The Cons
- Additional Information
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How It Works
Exchange-traded funds are portfolios of securities that are usually passively managed and track an index, offering an alternative to traditional index mutual funds. ETFs are listed on an exchange and trade intraday.
Many ETFs track indexes that were created specifically to meet the asset manager’s goals. State-based ETFs are no exception. As of this writing, there are two state-based equity index ETFs. If these prove to be a success, more are sure to follow.
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