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.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.