Interactive quiz: Do you really know what an ETF is?

We may earn a commission from links on this page.

If you’re reading this, you probably know something about exchange traded funds (ETFs)—a widely used investment product whose assets have grown tenfold over the last 20 years to over $3 trillion globally.* ETFs have a lot in common with a more familiar vehicle—mutual funds: both offer access to managed, diversified portfolios of securities. ETFs are typically lower cost, however, and most aim to track a market index.

But there’s more to ETFs. Let’s see how much you know.

ETFs offer diversification combined with lower costs, a wide range of investment choices and the ease and simplicity of trading like a stock. To learn more about using ETFs to help build a strong core portfolio, answer these 5 quick questions.

This article was produced on behalf of iShares by Quartz creative services and not by the Quartz editorial staff.

*Source: BlackRock, June 2016

Carefully consider the Funds’ investment objectives, risk factors, and charges and expenses before investing. This and other information can be found in the Funds’ prospectuses or, if available, the summary prospectuses which may be obtained by visiting www.iShares.com or www.blackrock.com. Read the prospectus carefully before investing.

Investing involves risk, including possible loss of principal.

Investment comparisons are for illustrative purposes only. To better understand the similarities and differences between investments, including investment objectives, risks, fees and expenses, it is important to read the products’ prospectuses.

Diversification and asset allocation may not protect against market risk or loss of principal.Transactions in shares of ETFs will result in brokerage commissions and will generate tax consequences. All regulated investment companies are obliged to distribute portfolio gains to shareholders. Certain traditional mutual funds can also be tax efficient.

The iShares Funds are distributed by BlackRock Investments, LLC (together with its affiliates, “BlackRock”). iSHARES and BLACKROCK are registered trademarks of BlackRock. All other marks are the property of their respective owners.