Exchange-Traded Funds (ETFs) are a simple way to gain diversification. Unlike mutual funds, ETFs trade throughout the day.
**How ETFs work**
– They track indexes, sectors, or strategies.
– Examples include S&P 500 ETFs, bond ETFs, and thematic ETFs.
– ETFs can be passive or active.
**Popular ETFs**
– SPDR S&P 500 ETF (SPY).
– Follows the Nasdaq 100.
– Vanguard Total Stock Market ETF (VTI).
– Adds global growth.
**Benefits of ETFs**
– Low fees compared to mutual funds.
– Covers multiple sectors.
– Easy to buy and sell.
**Risks of ETFs**
– Not immune to downturns.
– Tracking error may occur.
– Harder to beat markets.
**Conclusion**
ETFs are an essential tool for goldman sachs financial performance investors. With SPY, QQQ, VTI, and EEM, investors gain exposure to global markets.
