Education is an ongoing consideration for the ETF industry as more investors consider this nifty investment tool as part of a diversified portfolio and look for ways to maximize the advantages of the ETFs.

“A lot of the benefits come from the exchange listing, so the ‘ET’ part of ‘ETFs’ brings investors a tremendous amount of benefits,” Anita Rausch, Head of Capital Markets at WisdomTree, said at the Charles Schwab IMPACT 2018 conference.

ETFs are considered a type of wrapper that wraps around a basket of underlying securities, providing investors instant diversified exposure to a group of investments.

Rausch explained that ETFs provide another layer of liquidity for investors. Since ETFs can be traded back and forth on the secondary market, it insulates the ETF portfolio. Investors are not directly involved with the underlying securities that the ETF covers, but ETF investors are still exposed to the movements of the underlying securities.