Thank you so much @Tiger_Academy for the brief introduction to the concept and benefits of Exchange Traded Funds (ETFs).
ETFs are funds that can be bought and sold like stocks. For example, we can trade the Nasdaq 100ETF (QQQ) directly on the Tiger Trade app in both "pre-market" and "intraday trading" modes.
ETFs are funds that track not only well-known securities indexes such as the S&P 500 Index, the Nasdaq Index, and the Dow Jones Index, but also many other indexes that aren't as well-known. Nearly all indexes have a corresponding ETF.
ETFs are basically a type of mutual fund that invests in stocks. Each ETF is issued and run by a fund company and each one has a fund manager in charge of it. ETF funds are open-end funds, which means they can be bought or sold at any time.
For most investors, a key point that presents difficulty is stock selection. If we don't have enough time and energy to research stocks, an ETF fund is the way to go.
Because ETFs represent a basket of stocks, if one of those companies announces poor earnings results, it will have limited impact on the ETF as a whole. So, for new investors, buying ETFs not only avoids the trouble of picking stocks, but also spreads investment risk.
The holdings and weighting of ETFs are disclosed on a daily basis.
Another advantage of ETFs is saving money.
In the US, the average annual management fee for equity funds is 1.42%, compared to just 0.53% for equity ETFs. When it comes to fees to buy and sell ETFs, they are much lower than those for regular open-end funds.
There are many advantages of ETF funds that can save us time and money while allowing us to invest more efficiently.
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