What are ETFs? Exchange Traded Funds or ETFs for short, are often associated with index-tracking funds that trade on the stock exchange like shares. Their tracking feature means that the ETFs hold a basket of shares that match the index. For example, one cannot theoretically buy directly into the S&P 500 index, the most popular index in the world. However, one can replicate that index through various index ETFs such as the SPY ETF, which seeks to track the S&P 500 passively. The SPY ETF will hold the same shares, with the same composition as that of the S&P 500 index. Hence, for an investor who wishes to replicate the performance of the S&P 500 index, he/she just need to purchase the SPY ETF. Why buy ETFs? 4 Key reasons to purchase ETFs An ETF combines the benefits of a fund and a share in one security. Here are 4 key reasons why you should consider a purchase of ETFs....