Exchange-Traded Funds

Exchange-traded funds (ETFs) are investment vehicles that generally track a market index, such as the S&P 500® Index. ETFs trade on major exchanges like individual stocks, so their prices may vary throughout the day. There are thousands of ETFs available for investing, with varying complexities and market risks.

ETF features and benefits

Diversification

ETFs allow you to 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 compose a particular index.1


Tax Efficiency
Unlike mutual funds, exchange-traded funds generally do not have annual capital gains distributions that are the result of the active buying and selling within the fund. Instead, any gain or loss is realized when you sell the ETF shares.

Cost
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.

What is an ETF vs. a mutual fund?

Unlike a mutual fund, an ETF’s share price changes throughout the day as the individual securities in its portfolio change in value. Also, ETFs often have lower expense ratios than mutual funds because they are generally not actively managed.

How to buy an ETF

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A MassMutual financial professional will be with you every step of the way to help you prepare for the future.

    • Assess
    • During your initial phone call, your financial professional will ask you questions to understand your financial goals and objectives.

    • Recommend
    • After looking at your entire financial picture, your financial professional will provide you with suggestions to fill in the gaps so you can choose the products best suited for your situation.

    • Purchase
    • If you're satisfied with the recommendations, your financial professional will secure the products and services to help ensure your financial future.

    • Review
    • Your financial professional will work with you over time through periodic reviews to help you monitor your investments and reach your financial planning goals.

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1Diversification cannot assure a profit or protect against losses in the fund.

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, Member SIPC® (www.SIPC.org) and FINRA (www.FINRA.org) and a MassMutual subsidiary, 1295 State Street, Springfield, MA 01111-0001.