ETFs’ Advantages Make Them Popular

Exchange traded funds (ETFs) just keep on coming. Over the past decade, more than 500 have been created representing around $472 billion. ETFs are popular among individual investors as well as financial advisers because of their low costs and low-maintenance structure. Other advantages of ETFs, according to Susan Darroch for Money Management, include:

• Transparency: You know exactly how much of each stock makes up the ETF.
• ETFs offer safety in numbers. They have more diversification because they’re a basket of stocks rather than one individual stock.
• Their performance can be easily tracked.
• ETFs tend to have lower expenses and fees because they passively track indexes.
• They’re generally tax efficient because investors rarely have to pay capital gains taxes.