An Exchange-Traded Fund’s (“ETF”) prospectus contains its investment objectives, risks, charges, expenses, and other important information, and should be read and carefully considered before investing. For a current prospectus, visit the Exchange-Traded Funds Center at www.etrade.com/etf.
ETFs are subject to risks similar to those of other diversified investments. Investing in ETFs involves risk, including the possible loss of principal. Although ETFs are designed to provide investment results that generally correspond to the performance of their respective underlying indices, they may not be able to exactly replicate the performance of the indices because of expenses and other factors. ETF shares cannot be redeemed directly from the ETF, and there are typically brokerage commissions associated with trading ETFs that may negate their low management fees. ETFs are required to distribute portfolio gains to shareholders at year-end, which may be generated by portfolio rebalancing or the need to meet diversification requirements. ETF trading may also have tax consequences. An ETF’s expense ratio is the annual operating expense charged to investors.
You can buy and sell ETFs available through the E*TRADE Commission-Free ETF Program without paying brokerage commissions. For margin customers, certain ETFs purchased through the program are not margin eligible for 30 days from the purchase date. To discourage short-term trading, E*TRADE may charge a short-term trading fee on sales of participating ETFs held less than 30 days. E*TRADE has contracted with certain ETF companies to receive compensation in connection with the purchase of ETFs offered commission-free through E*TRADE. This additional compensation received as a result of these relationships is paid based on initial setup fees, and a percentage of invested assets ranging from 0 to 0.15% per annum, depending on the fund company.