Exchange-Traded Funds

    Whether you’re saving for retirement, for college expenses or to buy a home, you may want to include exchange-traded funds (ETFs) in your investment portfolio. ETFs are pooled investment vehicles that are generally designed to track a market index, such as the S&P 500® Index. Unlike mutual funds that price and trade once a day, ETFs trade on the major exchanges like individual stocks, so their prices may vary throughout the day along with the individual securities that comprise the index. There are thousands of ETFs available for investing, with varying complexities and market risks. Consider your risk profile and time horizon when including them in your portfolio.


    When you buy an investment that is based on an index, you invest in a broad variety of securities. For example, if you invest in an ETF that tracks the S&P 500® Index, your money is spread across the 500 companies that comprise the index. This means you also spread the investment risk among all the securities that comprise a particular index. Of course, diversification cannot assure a profit or protect against losses in the fund.


    ETFs generally have lower operating expenses than mutual funds because most ETFs are not actively managed and, therefore, do not incur the internal costs of buying and selling securities. Similar to other investments available in the marketplace, there may be sales commissions associated with the purchase and sale of ETFs.

    Tax Efficiency

    Unlike mutual funds, ETFs do not have annual capital gains distributions that are the result of the active buying and selling of securities in a fund. Instead, any gain is realized when you sell the ETF or there is a positive change in the value of the underlying securities in the index.

    ETFs are subject to market fluctuation and the risks associated with their underlying securities and are subject to management fees and other expenses. There can be no guarantee that any investment product or strategy will provide positive performance over time.

    Securities offered through registered representatives of MML Investors Services, LLC (MMLISI) and registered representatives of MSI Financial Services, Inc. (also known as MetLife Securities in some states). Members SIPC® ( and FINRA ( MMLIS and MSI Financial Services are subsidiaries of Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.

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