6. ETFs are tax efficient. Because ETF shares are created differently and no cash changes hands in this process, ETFs are highly tax efficient and rarely shoot off capital gains. [The Creation/Redemption Process Explained.]
7. ETFs are cheap. On average, ETFs cost less than most mutual funds. But beware: some mutual funds are cheaper than similar ETFs, so do your research to ensure you’re getting the best deal.
8. You have choices galore. Commodities, currencies, emerging markets, exotic hedge fund strategies, active management and more are available via ETFs. And that’s on top of the wide array of sector ETFs available. Not long ago, only institutional investors had exposure to things like commodities and currencies; now you can have it, too. [Who’s Who Behind the Scenes of ETFs?]
9. ETFs give you power. You, the investor, have control when you’re using in ETFs. You can choose your level of exposure (broad or narrow), you can choose your sector, you can compare funds on key points and choose from several competitors. The growth of the ETF industry has really helped put the control back in the investors’ hands. [Why ETFs Investors Win When There are “Too Many” Products.]
10. ETFs have brains. The vast majority of ETFs passively track index, but we’re now seeing more actively managed funds come to market. Actively managed ETFs give investors transparent access to an experienced manager, but at a lower cost than mutual funds. [4 Reasons to Like Actively Managed ETFs.]
For more stories about ETFs, visit our ETF 101 category.