Exchange-traded funds or ETFs are baskets of securities which trade on stocks, bonds, commodities, currencies, and precious metals. They are ideal for maintaining flexible, low-cost and tax-efficient portfolios. They do carry their own risks as other investment products. Here are a few points that show you how to buy ETF funds and make profits.

Although the past performance of a particular fund is no guarantee for future performance, it is wise to base one’s investment decisions on funds that have historically performed well. The following Mutual Funds have been identified as some of the top mutual funds to buy in 2012, based on these funds’ three years of risk and return data.

Mutual funds are often discussed as wise ways to invest. For those who are new to investing or are cautious investors, mutual funds can be an excellent tool for investing. Why buy mutual funds? Because they are diversified investments by design, and are managed professionally, your risks are minimized.

While you may not get to invest in the flavor of the month with a mutual fund, you also don't have to worry about your hot stock suddenly going cold, either. So what are mutual funds?

To understand what municipal bond funds are, you first have to understand what a municipal bond is. These bonds are made out to local governments and their value fluctuates depending in the credit of the area where they are issued.

Municipal bond funds are typically created by large financial groups and controlled by various professional traders that in turn invest these bonds. They are not subject to taxation and as such are a favorite of investors who have state with high tax rates.

There are five basic types of municipal bond funds;