The exchange traded fund industry has grown at a rapid pace since the first U.S. fund started trading in 1993. A majority of investors have been slow to warm up to ETFs, however, below are several convincing reasons to use them.
“The vast majority of ETFs were created to track sectors of financial markets. So using them means you are betting on specific parts of the market, and expect to earn whatever average returns those sectors generate — or suffer whatever losses they incur,” Tom Petruno wrote for The LA Times.
Below are a few highlights of using ETFs:
ETFs have a purpose for both long-term investors and short-term traders. Their structure allows them to be useful to a buy-and-hold portfolio, but those who want to move nimbly in and out of positions can utilize ETFs since they can trade with the ease of a single stock.