![Picture](/uploads/1/2/0/7/12076316/818944.jpg?236)
Exchange-traded funds (ETFs) have become increasingly popular since they were introduced in the mid-1990s. Their tax efficiencies and relatively low investing costs have attracted investors who like the idea of combining the diversification of mutual funds with the trading flexibility of stocks. ETFs can fill a unique role in your portfolio, but you need to understand just how they work and the differences among the dizzying variety of ETFs now available.