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September 8, 2025

Investing in ETFs offers several benefits. First, they typically have lower expense ratios than mutual funds, which means you pay less in fees. For example, if an ETF has an expense ratio of 0.5% and you invest $1,000, you will pay only $5 per year in fees. Second, ETFs provide instant diversification, as they allow you to invest in a basket of stocks or bonds rather than just one. Lastly, they trade like stocks throughout the day, giving you flexibility and control over your buying and selling. Overall, ETFs are a cost-effective way to gain exposure to various markets.

The expense ratio is the annual fee that mutual funds or ETFs charge their shareholders to cover the fund's operational costs. It is expressed as a percentage of your investment in the fund. A lower expense ratio generally means more of your money is working for you rather than going towards fees.