Additionally, looking at the overall trading fees, ETFs investors also enjoy low costs. For instance, some broad index-based ETFs can be traded commission-free. However, investors should note that different brokerage platforms offer varying commission-free ETF trades [Advisors Flock to Commission-Free ETFs]
Moreover, index ETFs come with some of the cheapest annual expenses around. The average expense ratio for a stock ETF is 0.59% and the cheapest comes in at 0.04%, according to XTF data.
While these characteristics help ETF investors save a little here and there, the savings add up over time, potentially bolstering overall returns by compounding over the years to come.
For more information on ETFs, visit our ETF 101 category.
Max Chen contributed to this article.