What are the benefits of investing in ETFs?

Lower investment costs, better diversification and an increasing number of options are just a few of the benefits of ETFs. Generally speaking, ETFs have lower fees than mutual funds — and this is a big part of their appeal. ETFs also offer better tax-efficiency than mutual funds.

What is an Exchange-Traded Fund (ETF)?

An ETF is called an exchange-traded fund because it’s traded on an exchange just like stocks are. The price of an ETF’s shares will change throughout the trading day as the shares are bought and sold on the market. This is unlike mutual funds, which are not traded on an exchange, and which trade only once per day after the markets close.

What are some of the risks associated with ETFs?

Some disadvantages to ETFs, which might be controversial, include: Can be misleading (like the fiasco with the temporarily negative oil futures and its affect on the Crude Oil ETF) An industry ETF might not fully represent an industry, and the overall individual stock weightings could be at the discretion of the fund manager