On the surface, ETFs that seem to invest in similar areas or sectors of the market may appear almost identical, but they can actually be very different due to alternative weighting strategies and even in the ways they gain exposure to the market areas they seek to access.

On the surface, ETFs that seem to invest in similar areas or sectors of the market may appear almost identical, but they can actually be very different due to alternative weighting strategies and even in the ways they gain exposure to the market areas they seek to access.

Exchange traded funds (ETFs) are hybrid investment products that offer a unique set of characteristics. Some of their traits and advantages are shared by traditional open-end mutual funds, while other aspects make them look and operate more like individual stocks. Understanding the structure of other common investment options—including open-end mutual funds, closed-end funds and hybrid “interval” funds—can help enhance an understanding of how ETFs are structured and how they are similar or different from these other investments.