ETFs explained: how they work, types, advantages, and how to use them in your portfolio.
An ETF (exchange-traded fund) is a basket of securities (stocks, bonds, etc.) that trades on an exchange like a stock. Buy one share and you own a slice of hundreds or thousands of holdings.
| ETF | Mutual Fund | |
|---|---|---|
| Trading | Intraday | Once per day at NAV |
| Minimum | 1 share | Often $1,000+ |
| Fees | Often lower | Varies |
| Tax efficiency | Often better | Can have more distributions |
For beginners: Start with a broad US or total world stock ETF. One fund can be your entire stock portfolio.
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