The Modern Investor

Low Cost & Transparent Fees: ETFs often have lower expense ratios than mutual funds, and their total expense ratio is publicly available. They also don’t charge 12b-1 fees.

Accessibility & Flexibility: Investors can purchase as little as one share and trade throughout the day, offering convenience and flexibility.

Broad Market Access: ETFs provide exposure to various investment strategies and global markets.

Tax Efficiency: The in-kind creation/redemption process minimizes capital gains distributions. ETF performance and transactions are typically unaffected by the actions of other fund holders.

Transparent Holdings: Daily disclosure of holdings and clear transaction costs through the bid/ask spread ensure investors know what they own and what they pay.

Visit the ETF Education section for more resources.

Execution Risk: Improper trade types or lack of understanding can lead to less favorable execution and affect returns.

Fund Closure: Could potentially lead to tax implications.

Counterparty Risk: If the ETF or mutual fund uses derivatives.

Performance Risk: The returns of the ETF are dictated by the returns of the underlying securities, similar to mutual funds.