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In recent years the number of ETFs in the market has increased considerably.  People are investing in them, but do they really understand what it is that they are buyiing into?  As I sit down with prospects, I find that the answer to that question is mostly "No".

What is an ETF? An ETF is basically an open-ended mutual fund, in the sense that it is a basket of securities purchased by the ETF sponsoring financial institution.  The basket is divided into ETF units, and each unit is representative of the basket, in the same manner that mutual fund units are representative of the investment positions of the mutual fund.

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