ETFs - Exchange Traded Funds

NextGen is the first college savings program in the country to offer investment portfolios comprised of Exchange Traded Funds (ETFs) directly to investors! These new portfolios in the NextGen Client Direct Series provide you with a cost-efficient, innovative investment option and added diversification through iShares®, a well-recognized provider of ETFs.

What are ETFs?

ETFs are similar to mutual funds; however, they are tied to an index and trade like stocks.  They are traded throughout the day (unlike mutual funds that are priced once per day at close of business) and typically offer lower expense ratios and broad diversification.

Lower Cost

Most ETFs are designed to track published market indices. Index-based investing offers several benefits, including lower costs and performance that seeks to track a benchmark, which generally means less “turnover” – or buying and selling of securities – which also helps to contain costs.


Since most ETFs are designed to track published market indices, many  ETFs are broadly diversified, and  typically hold all or many of the securities within the index being tracked. This diversification helps to reduce risk.

Investing involves risk, including possible loss of principal. Diversification does not assure a profit or protect against a loss in declining markets.


Most ETFs publish their holdings on a daily basis – so  investors  know what they own at all times. 


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