Uncovering the exchange-traded funds ETF Wrap

As exchange-traded funds (ETFs) have become increasingly popular and investors have discovered their benefits, financial services firms have developed more ways to package those benefits. Enter the ETF wrap, a packaging innovation that is beginning to gain attention. It offers all of the benefits typically associated with an index fund - and more. Here we'll look at the types of ETF wraps available, discuss their advantages and disadvantages, and see what the future holds for this relatively new financial product.

An ETF wrap is similar to a mutual fund wrap, except the underlying investments are ETFs. (If you are unfamiliar with ETFs or Mutual Fund Wraps, see Introduction to Exchange-Traded Funds and Introduction To Mutual Fund Wraps.) Like mutual fund wraps, ETF wraps are available in two varieties: discretionary and non-discretionary.

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