🕷️ Crawler Inspector

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Raw Queries and Responses

1. Shard Calculation

Query:

Response:

Calculated Shard: 127 (from laksa149)

2. Crawled Status Check

Query:

curl -X POST \
  'http://laksa127.int.ahrefs:8124/' \
  -H 'Content-Type: text/plain' \
  -H 'X-ClickHouse-Database: crawler3' \
  -H 'Authorization: Basic YXBpOg==' \
  -d 'SELECT getAhrefsURLFromUnparsed(src_unparsed) AS found_url, ifNull(toUnixTimestamp(download_stamp), 0) AS crawl_time, ifNull(toUnixTimestamp(props_url_first_seen), 0) AS first_indexed_time, download_http_code AS http_code, src_unparsed AS src_unparsed, src_root_hash AS src_root_hash, history_drop_reason AS history_drop_reason, meta_title AS meta_title, meta_descriptions AS meta_descriptions, attrs_boilerpipe_text AS attrs_boilerpipe_text, attrs_markdown AS attrs_markdown, attrs_readable_markdown AS attrs_readable_markdown, meta_canonical AS meta_canonical FROM crawler3.page_info_local FINAL PREWHERE (src_root_hash, src_unparsed) IN ((getAhrefsRootHashFromUnparsed(getAhrefsUnparsedNoserviceFromURL(\'https://moneywise.com/investing/what-is-an-etf\')), getAhrefsUnparsedNoserviceFromURL(\'https://moneywise.com/investing/what-is-an-etf\'))) FORMAT JSONEachRow'

Response:

{"found_url":"https:\/\/moneywise.com\/investing\/what-is-an-etf","crawl_time":1775552463,"first_indexed_time":1724490681,"http_code":200,"src_unparsed":"com,moneywise!\/investing\/what-is-an-etf s443","src_root_hash":"17552722006313878127","history_drop_reason":null,"meta_title":"What is an ETF and how do they work? [Comprehensive guide]","meta_descriptions":["ETFs are flexible, low-cost investments that offer diversification and trade like stocks. Learn how they work and how to add them to your portfolio."],"attrs_boilerpipe_text":"An ETF, or exchange-traded fund, is a popular investment fund that allow investors to diversify their portfolios with the flexibility of trading throughout the day. While ETFs come in various forms, they all share the same basic characteristics. These funds can be a great addition to any portfolio, but it's essential to understand how they work before diving in.\nETFs bundle multiple assets into one investment, making it easy to diversify your portfolio.\nETFs trade like stocks, so you can buy and sell throughout the day at market prices.\nWhat is an ETF?\nAn ETF is an investment vehicle that bundles many securities into a single investment. ETFs are designed to track the price of their underlying assets, which can include stocks, bonds, commodities, and more.\nUnlike \nmutual funds\n or index funds, ETFs are traded on stock exchanges throughout the day, just like individual stocks. That means investors can buy and sell them at market prices during trading hours. When you invest in an ETF, you don't directly own the underlying assets. Instead, you own shares in the fund itself, which represents a portion of its total holdings.\nAn ETF (exchange-traded fund) is an investment fund that holds a diversified portfolio of assets and trades on an exchange like a stock, allowing investors to gain broad market exposure with a single investment.\nHow do ETFs work?\nA fund provider creates an ETF by purchasing a collection of assets, such as stocks, bonds, or commodities. Then, a fund is designed by tracking the performance of those assets. Investors can then buy shares of the ETF on the stock exchange.\nETFs combine the benefits of both\n mutual funds and stocks\n. How?\nFirst, like mutual funds, ETFs are an easy way to diversify your portfolio because they follow many underlying assets and combine them into a single basket.\nWhen you invest in an ETF, you are exposed to all of the investments within the basket. This diversification helps to mitigate the risks from any individual security.\nETFs also have one of the key benefits of stock in that they can be traded throughout the day anytime the exchanges are open. If you decide you want to buy or sell shares of an ETF, you don’t have to wait until the end of the day. You can complete the transaction immediately.\nWhat is the difference between ETF and a stock?\nETFs and stocks have one very important characteristic in common: \nboth trade on major stock exchanges\n, so you can buy and sell whenever the exchange is open. Just like stocks, ETFs have their own ticket symbols so you can \ntrack their performance\n. \nThe major difference between the two is that when you purchase a stock, you’re buying ownership in a single company. When you buy shares in an ETF, you’re purchasing many underlying assets.\nFeature\nETF\nStock\nType of investor\nAll investors\nExperienced investors\nNumber of assets\nMany\nOne\nBest uses\nLong-term and diverse portfolios\nGranular, strategic investment strategies\nManagement fees\nFees typically apply\nNo management fees\nTrade times\nNear-instant\nNear-instant\nTypical trade commission\nCommission-free\nCommission-free\nWhat is the difference between ETF and a mutual fund?\nETFs and mutual funds are both investment vehicles designed to hold many underlying investments. When you buy shares in these funds, you’re investing in each of its underlying assets. Both can specialize in different asset classes, sectors and styles, and both can be an effective way of diversifying your portfolio.\nFeature\nETF\nMutual fund\nTrading\nTraded throughout the day on exchanges.\nTraded once per day at the end of the trading day.\nPrice\nPrice fluctuates throughout the day based on market conditions.\nPrice set at the end of the day based on the closing price.\nManagement style\nGenerally passively managed, designed to track an index.\nUsually actively managed, designed to beat the market.\nFees\nRelatively low management fees.\nHigher management fees due to active management.\nAre ETFs a good investment?\nFor the typical investor, ETFs are an excellent investment choice. The vast majority of my personal portfolio is in a variety of ETFs. When you’re investing for long-term goals like retirement or funding a college education, it’s tough to beat ETFs.\nETFs are arguably the best way to invest for the average person because of its low fees, instant access to diversified portfolios and ability to quickly buy and sell. With a target date fund ETF or a mix of diversified stock and bond ETFs, you could find all of your investment needs met with only a few ETFs.\nPros and cons of ETFs\nPros\nDiversification:\nETFs make it easy to invest in many underlying securities across different asset classes, therefore reducing your exposure risk.\nLow management fees:\nBecause most ETFs are passively managed, they have lower management fees than a typical mutual fund.\nEasy to trade:\nETFs trade on major exchanges throughout the day, just like stocks. As a result, you get real-time pricing without waiting until the end of the day.\nTax efficiency:\nMutual fund investors may pay capital gains taxes while they still hold their shares, while ETF investors don’t pay taxes until they sell their investment.\nCons\nPossible trading fees:\nDepending on the brokerage firm you use, you might pay commissions or trading fees when buying or selling ETF shares.\nIlliquidity:\nSome ETFs can be relatively illiquid, meaning you may have a difficult time selling at the price you would hope.\nManagement fees:\nMost ETFs are passively managed, resulting in low management fees. But if you’re not paying attention, you could inadvertently invest in an actively managed fund and pay a higher management fee than you expect.\nFAQs\nWhat is an ETF and how does it work?\n+\nAn ETF is an investment fund that allows you to buy multiple stocks, bonds, or other investments with a single purchase. ETFs pool investor assets, allowing investors to buy hundreds or even thousands of stocks at once.\nAre ETFs a good investment for beginners?\n+\nYes, ETFs are a good investment option for beginners because they offer built-in diversification, low fees and are easy to trade.\nWhat is the downside of ETFs?\n+\nETFs require paying fees to the fund manager and can make your investments more difficult to understand. Because you’re buying many stocks at once with many ETFs, it’s harder to keep track of the underlying stocks than when buying single stocks.\nAre ETFs safer than stocks?\n+\nETFs are generally less risky than individual stocks because they spread your investments across many assets, but they can still lose value.\nEric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time.\nLatest Articles\nDisclaimer\nThe content provided on Moneywise is information to help users become financially literate. It is neither investment, tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, enter into any loan, mortgage or insurance agreements or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.  Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.\n†Terms and Conditions apply.","attrs_markdown":"![](https:\/\/www.facebook.com\/tr?id=131147930823002&ev=PageView&noscript=1)\n\n[Skip to main content](https:\/\/moneywise.com\/investing\/what-is-an-etf#main)\n\n[Live a richer life.](https:\/\/moneywise.com\/)\n\n- [News](https:\/\/moneywise.com\/news)\n- [Investing](https:\/\/moneywise.com\/investing)\n- [Retirement](https:\/\/moneywise.com\/retirement)\n- [Banking](https:\/\/moneywise.com\/banking)\n- [Mortgages](https:\/\/moneywise.com\/mortgages)\n- [Loans](https:\/\/moneywise.com\/loans)\n- [Insurance](https:\/\/moneywise.com\/insurance)\n- [Taxes](https:\/\/moneywise.com\/taxes)\n\nBack\n\n###\n\nBack\n\n###\n\n### Unlock exclusive content\nBy signing up, you accept Moneywise [Terms of Use](https:\/\/moneywise.com\/terms), [Subscription Agreement](https:\/\/moneywise.com\/subscription-agreement), and [Privacy Policy](https:\/\/moneywise.com\/privacy).\n\n- [News](https:\/\/moneywise.com\/news)\n- [Investing](https:\/\/moneywise.com\/investing)\n- [Retirement](https:\/\/moneywise.com\/retirement)\n- [Banking](https:\/\/moneywise.com\/banking)\n- [Mortgages](https:\/\/moneywise.com\/mortgages)\n- [Loans](https:\/\/moneywise.com\/loans)\n- [Insurance](https:\/\/moneywise.com\/insurance)\n- [Taxes](https:\/\/moneywise.com\/taxes)\n\nSubscribe\n\n### On this page\n- Wise Takeaways\n- What is an ETF?\n- How do ETFs work?\n- What is the difference between ETF and a stock?\n- What is the difference between ETF and a mutual fund?\n- Are ETFs a good investment?\n- FAQs\n- Latest Articles\n\n###\n### This is an exclusive story from our newsletter — subscribe for more\n\n- Discounts and special offers\n- Subscriber-only articles and interviews\n- Breaking news and trending topics\n\nJoin 200K subscribers\n\nAlready a subscriber? Sign in.\n\nBy signing up, you accept Moneywise's [Terms of Use](https:\/\/moneywise.com\/terms), [Subscription Agreement](https:\/\/moneywise.com\/subscription-agreement), and [Privacy Policy](https:\/\/moneywise.com\/privacy).\n\nNot interested ? Continue reading\n\n[Home](https:\/\/moneywise.com\/ \"Home\")\n\n[Investing](https:\/\/moneywise.com\/investing\/ \"Investing\")\n\nWhat is an ETF\n\n# What is an ETF and how do they work?\n![](https:\/\/media1.moneywise.com\/avatars\/eric-rosenberg-1685476328.jpg)\n\n[Eric Rosenberg](https:\/\/moneywise.com\/author\/eric-rosenberg)\n\n1+ More\n\nUpdated May 14, 2025\n\nPartners on this page may provide us earnings.\n\nFact checked by [Clay Halton](https:\/\/moneywise.com\/author\/clay-halton)\n\nUpdated May 14, 2025\n\nWhy you can trust Moneywise\n\nAt Moneywise, we provide clear, unbiased insights to help you make confident financial decisions. Our experts break down complex topics through independent and transparent research. While we partner with trusted financial brands, our reviews remain independent and focused on what’s best for you, not our partners.\n\n55M+\n\nReaders\n\n300+\n\nReviews\n\n3,000+\n\nMetrics\n\nPartners on this page may provide us earnings.\n\nAn ETF, or exchange-traded fund, is a popular investment fund that allow investors to diversify their portfolios with the flexibility of trading throughout the day. While ETFs come in various forms, they all share the same basic characteristics. These funds can be a great addition to any portfolio, but it's essential to understand how they work before diving in.\n\n![](https:\/\/media1.moneywise.com\/icons\/topics\/info-option.svg)\n\n## Wise Takeaways\n- ETFs bundle multiple assets into one investment, making it easy to diversify your portfolio.\n- ETFs trade like stocks, so you can buy and sell throughout the day at market prices.\n## What is an ETF?\nAn ETF is an investment vehicle that bundles many securities into a single investment. ETFs are designed to track the price of their underlying assets, which can include stocks, bonds, commodities, and more.\n\nUnlike [mutual funds](https:\/\/moneywise.com\/investing\/what-are-mutual-funds-what-got-them-so-popular-among-investors\/) or index funds, ETFs are traded on stock exchanges throughout the day, just like individual stocks. That means investors can buy and sell them at market prices during trading hours. When you invest in an ETF, you don't directly own the underlying assets. Instead, you own shares in the fund itself, which represents a portion of its total holdings.\n\n### ETF Defined\nAn ETF (exchange-traded fund) is an investment fund that holds a diversified portfolio of assets and trades on an exchange like a stock, allowing investors to gain broad market exposure with a single investment.\n## How do ETFs work?\nA fund provider creates an ETF by purchasing a collection of assets, such as stocks, bonds, or commodities. Then, a fund is designed by tracking the performance of those assets. Investors can then buy shares of the ETF on the stock exchange.\n\nETFs combine the benefits of both **mutual funds and stocks**. How?\n\n- First, like mutual funds, ETFs are an easy way to diversify your portfolio because they follow many underlying assets and combine them into a single basket.\n- When you invest in an ETF, you are exposed to all of the investments within the basket. This diversification helps to mitigate the risks from any individual security.\n- ETFs also have one of the key benefits of stock in that they can be traded throughout the day anytime the exchanges are open. If you decide you want to buy or sell shares of an ETF, you don’t have to wait until the end of the day. You can complete the transaction immediately.\n## What is the difference between ETF and a stock?\nETFs and stocks have one very important characteristic in common: **both trade on major stock exchanges**, so you can buy and sell whenever the exchange is open. Just like stocks, ETFs have their own ticket symbols so you can [track their performance](https:\/\/moneywise.com\/investing\/stocks\/best-stock-tracking-apps\/).\n\nThe major difference between the two is that when you purchase a stock, you’re buying ownership in a single company. When you buy shares in an ETF, you’re purchasing many underlying assets.\n\n| **Feature** | **ETF** | **Stock** |\n|---|---|---|\n| **Type of investor** | All investors | Experienced investors |\n| **Number of assets** | Many | One |\n| **Best uses** | Long-term and diverse portfolios | Granular, strategic investment strategies |\n| **Management fees** | Fees typically apply | No management fees |\n| **Trade times** | Near-instant | Near-instant |\n| **Typical trade commission** | Commission-free | Commission-free |\n## What is the difference between ETF and a mutual fund?\nETFs and mutual funds are both investment vehicles designed to hold many underlying investments. When you buy shares in these funds, you’re investing in each of its underlying assets. Both can specialize in different asset classes, sectors and styles, and both can be an effective way of diversifying your portfolio.\n\n| **Feature** | **ETF** | **Mutual fund** |\n|---|---|---|\n| **Trading** | Traded throughout the day on exchanges. | Traded once per day at the end of the trading day. |\n| **Price** | Price fluctuates throughout the day based on market conditions. | Price set at the end of the day based on the closing price. |\n| **Management style** | Generally passively managed, designed to track an index. | Usually actively managed, designed to beat the market. |\n| **Fees** | Relatively low management fees. | Higher management fees due to active management. |\n## Are ETFs a good investment?\nFor the typical investor, ETFs are an excellent investment choice. The vast majority of my personal portfolio is in a variety of ETFs. When you’re investing for long-term goals like retirement or funding a college education, it’s tough to beat ETFs.\n\nETFs are arguably the best way to invest for the average person because of its low fees, instant access to diversified portfolios and ability to quickly buy and sell. With a target date fund ETF or a mix of diversified stock and bond ETFs, you could find all of your investment needs met with only a few ETFs.\n\n### Pros and cons of ETFs\nPros\n\n- **Diversification:** ETFs make it easy to invest in many underlying securities across different asset classes, therefore reducing your exposure risk.\n- **Low management fees:** Because most ETFs are passively managed, they have lower management fees than a typical mutual fund.\n- **Easy to trade:** ETFs trade on major exchanges throughout the day, just like stocks. As a result, you get real-time pricing without waiting until the end of the day.\n- **Tax efficiency:** Mutual fund investors may pay capital gains taxes while they still hold their shares, while ETF investors don’t pay taxes until they sell their investment.\n\nCons\n\n- **Possible trading fees:** Depending on the brokerage firm you use, you might pay commissions or trading fees when buying or selling ETF shares.\n- **Illiquidity:** Some ETFs can be relatively illiquid, meaning you may have a difficult time selling at the price you would hope.\n- **Management fees:** Most ETFs are passively managed, resulting in low management fees. But if you’re not paying attention, you could inadvertently invest in an actively managed fund and pay a higher management fee than you expect.\n## FAQs\n- ### What is an ETF and how does it work?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  An ETF is an investment fund that allows you to buy multiple stocks, bonds, or other investments with a single purchase. ETFs pool investor assets, allowing investors to buy hundreds or even thousands of stocks at once.\n- ### Are ETFs a good investment for beginners?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  Yes, ETFs are a good investment option for beginners because they offer built-in diversification, low fees and are easy to trade.\n- ### What is the downside of ETFs?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  ETFs require paying fees to the fund manager and can make your investments more difficult to understand. Because you’re buying many stocks at once with many ETFs, it’s harder to keep track of the underlying stocks than when buying single stocks.\n- ### Are ETFs safer than stocks?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  ETFs are generally less risky than individual stocks because they spread your investments across many assets, but they can still lose value.\n\n- ### Sources\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  1\\. Finra: [Market Caps Explained](https:\/\/www.finra.org\/investors\/insights\/market-cap)\n\n![](https:\/\/media1.moneywise.com\/avatars\/eric-rosenberg-1685476328.jpg)\n\n[Eric Rosenberg](https:\/\/moneywise.com\/author\/eric-rosenberg)  Contributor\n\n![](https:\/\/media1.moneywise.com\/avatars\/eric-rosenberg-1685476328.jpg)\n\n[Eric Rosenberg](https:\/\/moneywise.com\/author\/eric-rosenberg)  Contributor\n\nEric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time.\n\n## Latest Articles\n[![An Amazon Web Services AI data center, where a technician can be seen working, is among hindreds of data centers fueling the need for increased power across the U.S.](https:\/\/media1.moneywise.com\/production\/articles\/175905\/hero_gettyimages-2249021916_20260406_154944.jpg) JPMorgan flags \\$1T infrastructure prospect](https:\/\/moneywise.com\/news\/investing\/jpmorgan-just-flagged-a-1-trillion-us-investment-opportunity-most-americans-havent-heard-about-yet)\n\n[By Clay Halton 13h ago](https:\/\/moneywise.com\/author\/clay-halton)\n\n[![Robert Kiyosaki speaks on stage in Sun City, Arizona, Oct. 21, 2022.](https:\/\/media1.moneywise.com\/a\/97127\/robert-kiyosaki-warns-of-greater-depression-coming-to-us_hero_1800x800_v20250425141910.jpg) Robert Kiyosaki warns of a 'Greater Depression'](https:\/\/moneywise.com\/investing\/robert-kiyosaki-warns-of-greater-depression-coming-to-us)\n\n[By Jing Pan 13h ago](https:\/\/moneywise.com\/author\/jing-pan)\n\n[![Young millionaire talking on the phone on a yacht.](https:\/\/media1.moneywise.com\/a\/65120\/rich-young-americans_hero_1800x800_v20251217092539.jpg) Rich young Americans are ditching the stock market](https:\/\/moneywise.com\/investing\/alternative-investments\/rich-young-americans)\n\n[By Phil Osagie 14h ago](https:\/\/moneywise.com\/author\/phil-osagie)\n\n[![An EV charges at an EVgo electric charger in California.](https:\/\/media1.moneywise.com\/production\/articles\/175831\/hero_gettyimages-2269134749_20260406_105433.jpg) With gas at +\\$4\/gallon, should you get an EV?](https:\/\/moneywise.com\/auto\/electric-cars-look-tempting-as-gas-prices-skyrocket-from-the-iran-war-should-you-switch-to-an-ev-or-wait-it-out)\n\n[By Vawn Himmelsbach 18h ago](https:\/\/moneywise.com\/author\/vawn-himmelsbach)\n\n[![Locksmith scam](https:\/\/media1.moneywise.com\/production\/articles\/174866\/hero_screenshot-2026-04-02-at-112532-am_20260402_114624.png) Locksmith scams 90-year-old woman](https:\/\/moneywise.com\/news\/i-feel-like-i-failed-a-90-year-old-woman-hired-a-locksmith-and-the-company-stole-nearly-4000-from-her-instead)\n\n[By Jessica Wong 20h ago](https:\/\/moneywise.com\/author\/jessica-wong)\n\n[![Senior lawyer scam](https:\/\/media1.moneywise.com\/production\/articles\/174659\/hero_tired-mature-70s-man-working-at-laptop-from-home-2026-03-24-08-55-02-utc_20260401_162245.jpg) Scammed twice: How recovery fraud targets victims](https:\/\/moneywise.com\/news\/scammers-stole-1-million-from-an-elderly-man-then-came-back-posing-as-lawyers-to-steal-even-more)\n\n[By Jessica Wong 21h ago](https:\/\/moneywise.com\/author\/jessica-wong)\n\nPrev\n\n1\n\n2\n\n3\n\n4\n\n5\n\n6\n\n7\n\n8\n\n9\n\n10\n\n11\n\n12\n\n13\n\n14\n\n15\n\n16\n\nNext\n\n#### Disclaimer\nThe content provided on Moneywise is information to help users become financially literate. It is neither investment, tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, enter into any loan, mortgage or insurance agreements or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. 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While ETFs come in various forms, they all share the same basic characteristics. These funds can be a great addition to any portfolio, but it's essential to understand how they work before diving in.\n\n![](https:\/\/media1.moneywise.com\/icons\/topics\/info-option.svg)\n\n- ETFs bundle multiple assets into one investment, making it easy to diversify your portfolio.\n- ETFs trade like stocks, so you can buy and sell throughout the day at market prices.\n## What is an ETF?\nAn ETF is an investment vehicle that bundles many securities into a single investment. ETFs are designed to track the price of their underlying assets, which can include stocks, bonds, commodities, and more.\n\nUnlike [mutual funds](https:\/\/moneywise.com\/investing\/what-are-mutual-funds-what-got-them-so-popular-among-investors\/) or index funds, ETFs are traded on stock exchanges throughout the day, just like individual stocks. That means investors can buy and sell them at market prices during trading hours. When you invest in an ETF, you don't directly own the underlying assets. Instead, you own shares in the fund itself, which represents a portion of its total holdings.\n\nAn ETF (exchange-traded fund) is an investment fund that holds a diversified portfolio of assets and trades on an exchange like a stock, allowing investors to gain broad market exposure with a single investment.\n\n## How do ETFs work?\nA fund provider creates an ETF by purchasing a collection of assets, such as stocks, bonds, or commodities. Then, a fund is designed by tracking the performance of those assets. Investors can then buy shares of the ETF on the stock exchange.\n\nETFs combine the benefits of both **mutual funds and stocks**. How?\n\n- First, like mutual funds, ETFs are an easy way to diversify your portfolio because they follow many underlying assets and combine them into a single basket.\n- When you invest in an ETF, you are exposed to all of the investments within the basket. This diversification helps to mitigate the risks from any individual security.\n- ETFs also have one of the key benefits of stock in that they can be traded throughout the day anytime the exchanges are open. If you decide you want to buy or sell shares of an ETF, you don’t have to wait until the end of the day. You can complete the transaction immediately.\n## What is the difference between ETF and a stock?\nETFs and stocks have one very important characteristic in common: **both trade on major stock exchanges**, so you can buy and sell whenever the exchange is open. Just like stocks, ETFs have their own ticket symbols so you can [track their performance](https:\/\/moneywise.com\/investing\/stocks\/best-stock-tracking-apps\/).\n\nThe major difference between the two is that when you purchase a stock, you’re buying ownership in a single company. When you buy shares in an ETF, you’re purchasing many underlying assets.\n\n| **Feature** | **ETF** | **Stock** |\n|---|---|---|\n| **Type of investor** | All investors | Experienced investors |\n| **Number of assets** | Many | One |\n| **Best uses** | Long-term and diverse portfolios | Granular, strategic investment strategies |\n| **Management fees** | Fees typically apply | No management fees |\n| **Trade times** | Near-instant | Near-instant |\n| **Typical trade commission** | Commission-free | Commission-free |\n## What is the difference between ETF and a mutual fund?\nETFs and mutual funds are both investment vehicles designed to hold many underlying investments. When you buy shares in these funds, you’re investing in each of its underlying assets. Both can specialize in different asset classes, sectors and styles, and both can be an effective way of diversifying your portfolio.\n\n| **Feature** | **ETF** | **Mutual fund** |\n|---|---|---|\n| **Trading** | Traded throughout the day on exchanges. | Traded once per day at the end of the trading day. |\n| **Price** | Price fluctuates throughout the day based on market conditions. | Price set at the end of the day based on the closing price. |\n| **Management style** | Generally passively managed, designed to track an index. | Usually actively managed, designed to beat the market. |\n| **Fees** | Relatively low management fees. | Higher management fees due to active management. |\n## Are ETFs a good investment?\nFor the typical investor, ETFs are an excellent investment choice. The vast majority of my personal portfolio is in a variety of ETFs. When you’re investing for long-term goals like retirement or funding a college education, it’s tough to beat ETFs.\n\nETFs are arguably the best way to invest for the average person because of its low fees, instant access to diversified portfolios and ability to quickly buy and sell. With a target date fund ETF or a mix of diversified stock and bond ETFs, you could find all of your investment needs met with only a few ETFs.\n\n### Pros and cons of ETFs\nPros\n\n- **Diversification:** ETFs make it easy to invest in many underlying securities across different asset classes, therefore reducing your exposure risk.\n- **Low management fees:** Because most ETFs are passively managed, they have lower management fees than a typical mutual fund.\n- **Easy to trade:** ETFs trade on major exchanges throughout the day, just like stocks. As a result, you get real-time pricing without waiting until the end of the day.\n- **Tax efficiency:** Mutual fund investors may pay capital gains taxes while they still hold their shares, while ETF investors don’t pay taxes until they sell their investment.\n\nCons\n\n- **Possible trading fees:** Depending on the brokerage firm you use, you might pay commissions or trading fees when buying or selling ETF shares.\n- **Illiquidity:** Some ETFs can be relatively illiquid, meaning you may have a difficult time selling at the price you would hope.\n- **Management fees:** Most ETFs are passively managed, resulting in low management fees. But if you’re not paying attention, you could inadvertently invest in an actively managed fund and pay a higher management fee than you expect.\n## FAQs\n- ### What is an ETF and how does it work?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  An ETF is an investment fund that allows you to buy multiple stocks, bonds, or other investments with a single purchase. ETFs pool investor assets, allowing investors to buy hundreds or even thousands of stocks at once.\n- ### Are ETFs a good investment for beginners?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  Yes, ETFs are a good investment option for beginners because they offer built-in diversification, low fees and are easy to trade.\n- ### What is the downside of ETFs?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  ETFs require paying fees to the fund manager and can make your investments more difficult to understand. Because you’re buying many stocks at once with many ETFs, it’s harder to keep track of the underlying stocks than when buying single stocks.\n- ### Are ETFs safer than stocks?\n  [\\+](https:\/\/moneywise.com\/investing\/what-is-an-etf)\n  ETFs are generally less risky than individual stocks because they spread your investments across many assets, but they can still lose value.\n\nEric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time.\n\n## Latest Articles\n#### Disclaimer\nThe content provided on Moneywise is information to help users become financially literate. It is neither investment, tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, enter into any loan, mortgage or insurance agreements or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.\n\n†Terms and Conditions apply.","meta_canonical":null}

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Boilerpipe Text	An ETF, or exchange-traded fund, is a popular investment fund that allow investors to diversify their portfolios with the flexibility of trading throughout the day. While ETFs come in various forms, they all share the same basic characteristics. These funds can be a great addition to any portfolio, but it's essential to understand how they work before diving in. ETFs bundle multiple assets into one investment, making it easy to diversify your portfolio. ETFs trade like stocks, so you can buy and sell throughout the day at market prices. What is an ETF? An ETF is an investment vehicle that bundles many securities into a single investment. ETFs are designed to track the price of their underlying assets, which can include stocks, bonds, commodities, and more. Unlike mutual funds or index funds, ETFs are traded on stock exchanges throughout the day, just like individual stocks. That means investors can buy and sell them at market prices during trading hours. When you invest in an ETF, you don't directly own the underlying assets. Instead, you own shares in the fund itself, which represents a portion of its total holdings. An ETF (exchange-traded fund) is an investment fund that holds a diversified portfolio of assets and trades on an exchange like a stock, allowing investors to gain broad market exposure with a single investment. How do ETFs work? A fund provider creates an ETF by purchasing a collection of assets, such as stocks, bonds, or commodities. Then, a fund is designed by tracking the performance of those assets. Investors can then buy shares of the ETF on the stock exchange. ETFs combine the benefits of both mutual funds and stocks . How? First, like mutual funds, ETFs are an easy way to diversify your portfolio because they follow many underlying assets and combine them into a single basket. When you invest in an ETF, you are exposed to all of the investments within the basket. This diversification helps to mitigate the risks from any individual security. ETFs also have one of the key benefits of stock in that they can be traded throughout the day anytime the exchanges are open. If you decide you want to buy or sell shares of an ETF, you don’t have to wait until the end of the day. You can complete the transaction immediately. What is the difference between ETF and a stock? ETFs and stocks have one very important characteristic in common: both trade on major stock exchanges , so you can buy and sell whenever the exchange is open. Just like stocks, ETFs have their own ticket symbols so you can track their performance . The major difference between the two is that when you purchase a stock, you’re buying ownership in a single company. When you buy shares in an ETF, you’re purchasing many underlying assets. Feature ETF Stock Type of investor All investors Experienced investors Number of assets Many One Best uses Long-term and diverse portfolios Granular, strategic investment strategies Management fees Fees typically apply No management fees Trade times Near-instant Near-instant Typical trade commission Commission-free Commission-free What is the difference between ETF and a mutual fund? ETFs and mutual funds are both investment vehicles designed to hold many underlying investments. When you buy shares in these funds, you’re investing in each of its underlying assets. Both can specialize in different asset classes, sectors and styles, and both can be an effective way of diversifying your portfolio. Feature ETF Mutual fund Trading Traded throughout the day on exchanges. Traded once per day at the end of the trading day. Price Price fluctuates throughout the day based on market conditions. Price set at the end of the day based on the closing price. Management style Generally passively managed, designed to track an index. Usually actively managed, designed to beat the market. Fees Relatively low management fees. Higher management fees due to active management. Are ETFs a good investment? For the typical investor, ETFs are an excellent investment choice. The vast majority of my personal portfolio is in a variety of ETFs. When you’re investing for long-term goals like retirement or funding a college education, it’s tough to beat ETFs. ETFs are arguably the best way to invest for the average person because of its low fees, instant access to diversified portfolios and ability to quickly buy and sell. With a target date fund ETF or a mix of diversified stock and bond ETFs, you could find all of your investment needs met with only a few ETFs. Pros and cons of ETFs Pros Diversification: ETFs make it easy to invest in many underlying securities across different asset classes, therefore reducing your exposure risk. Low management fees: Because most ETFs are passively managed, they have lower management fees than a typical mutual fund. Easy to trade: ETFs trade on major exchanges throughout the day, just like stocks. As a result, you get real-time pricing without waiting until the end of the day. Tax efficiency: Mutual fund investors may pay capital gains taxes while they still hold their shares, while ETF investors don’t pay taxes until they sell their investment. Cons Possible trading fees: Depending on the brokerage firm you use, you might pay commissions or trading fees when buying or selling ETF shares. Illiquidity: Some ETFs can be relatively illiquid, meaning you may have a difficult time selling at the price you would hope. Management fees: Most ETFs are passively managed, resulting in low management fees. But if you’re not paying attention, you could inadvertently invest in an actively managed fund and pay a higher management fee than you expect. FAQs What is an ETF and how does it work? + An ETF is an investment fund that allows you to buy multiple stocks, bonds, or other investments with a single purchase. ETFs pool investor assets, allowing investors to buy hundreds or even thousands of stocks at once. Are ETFs a good investment for beginners? + Yes, ETFs are a good investment option for beginners because they offer built-in diversification, low fees and are easy to trade. What is the downside of ETFs? + ETFs require paying fees to the fund manager and can make your investments more difficult to understand. Because you’re buying many stocks at once with many ETFs, it’s harder to keep track of the underlying stocks than when buying single stocks. Are ETFs safer than stocks? + ETFs are generally less risky than individual stocks because they spread your investments across many assets, but they can still lose value. Eric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time. Latest Articles Disclaimer The content provided on Moneywise is information to help users become financially literate. It is neither investment, tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, enter into any loan, mortgage or insurance agreements or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website. †Terms and Conditions apply.
Markdown	![](https://www.facebook.com/tr?id=131147930823002&ev=PageView&noscript=1) [Skip to main content](https://moneywise.com/investing/what-is-an-etf#main) [Live a richer life.](https://moneywise.com/) - [News](https://moneywise.com/news) - [Investing](https://moneywise.com/investing) - [Retirement](https://moneywise.com/retirement) - [Banking](https://moneywise.com/banking) - [Mortgages](https://moneywise.com/mortgages) - [Loans](https://moneywise.com/loans) - [Insurance](https://moneywise.com/insurance) - [Taxes](https://moneywise.com/taxes) Back ### Back ### ### Unlock exclusive content By signing up, you accept Moneywise [Terms of Use](https://moneywise.com/terms), [Subscription Agreement](https://moneywise.com/subscription-agreement), and [Privacy Policy](https://moneywise.com/privacy). - [News](https://moneywise.com/news) - [Investing](https://moneywise.com/investing) - [Retirement](https://moneywise.com/retirement) - [Banking](https://moneywise.com/banking) - [Mortgages](https://moneywise.com/mortgages) - [Loans](https://moneywise.com/loans) - [Insurance](https://moneywise.com/insurance) - [Taxes](https://moneywise.com/taxes) Subscribe ### On this page - Wise Takeaways - What is an ETF? - How do ETFs work? - What is the difference between ETF and a stock? - What is the difference between ETF and a mutual fund? - Are ETFs a good investment? - FAQs - Latest Articles ### ### This is an exclusive story from our newsletter — subscribe for more - Discounts and special offers - Subscriber-only articles and interviews - Breaking news and trending topics Join 200K subscribers Already a subscriber? Sign in. By signing up, you accept Moneywise's [Terms of Use](https://moneywise.com/terms), [Subscription Agreement](https://moneywise.com/subscription-agreement), and [Privacy Policy](https://moneywise.com/privacy). Not interested ? Continue reading [Home](https://moneywise.com/ "Home") [Investing](https://moneywise.com/investing/ "Investing") What is an ETF # What is an ETF and how do they work? ![](https://media1.moneywise.com/avatars/eric-rosenberg-1685476328.jpg) [Eric Rosenberg](https://moneywise.com/author/eric-rosenberg) 1+ More Updated May 14, 2025 Partners on this page may provide us earnings. Fact checked by [Clay Halton](https://moneywise.com/author/clay-halton) Updated May 14, 2025 Why you can trust Moneywise At Moneywise, we provide clear, unbiased insights to help you make confident financial decisions. Our experts break down complex topics through independent and transparent research. While we partner with trusted financial brands, our reviews remain independent and focused on what’s best for you, not our partners. 55M+ Readers 300+ Reviews 3,000+ Metrics Partners on this page may provide us earnings. An ETF, or exchange-traded fund, is a popular investment fund that allow investors to diversify their portfolios with the flexibility of trading throughout the day. While ETFs come in various forms, they all share the same basic characteristics. These funds can be a great addition to any portfolio, but it's essential to understand how they work before diving in. ![](https://media1.moneywise.com/icons/topics/info-option.svg) ## Wise Takeaways - ETFs bundle multiple assets into one investment, making it easy to diversify your portfolio. - ETFs trade like stocks, so you can buy and sell throughout the day at market prices. ## What is an ETF? An ETF is an investment vehicle that bundles many securities into a single investment. ETFs are designed to track the price of their underlying assets, which can include stocks, bonds, commodities, and more. Unlike [mutual funds](https://moneywise.com/investing/what-are-mutual-funds-what-got-them-so-popular-among-investors/) or index funds, ETFs are traded on stock exchanges throughout the day, just like individual stocks. That means investors can buy and sell them at market prices during trading hours. When you invest in an ETF, you don't directly own the underlying assets. Instead, you own shares in the fund itself, which represents a portion of its total holdings. ### ETF Defined An ETF (exchange-traded fund) is an investment fund that holds a diversified portfolio of assets and trades on an exchange like a stock, allowing investors to gain broad market exposure with a single investment. ## How do ETFs work? A fund provider creates an ETF by purchasing a collection of assets, such as stocks, bonds, or commodities. Then, a fund is designed by tracking the performance of those assets. Investors can then buy shares of the ETF on the stock exchange. ETFs combine the benefits of both mutual funds and stocks. How? - First, like mutual funds, ETFs are an easy way to diversify your portfolio because they follow many underlying assets and combine them into a single basket. - When you invest in an ETF, you are exposed to all of the investments within the basket. This diversification helps to mitigate the risks from any individual security. - ETFs also have one of the key benefits of stock in that they can be traded throughout the day anytime the exchanges are open. If you decide you want to buy or sell shares of an ETF, you don’t have to wait until the end of the day. You can complete the transaction immediately. ## What is the difference between ETF and a stock? ETFs and stocks have one very important characteristic in common: both trade on major stock exchanges, so you can buy and sell whenever the exchange is open. Just like stocks, ETFs have their own ticket symbols so you can [track their performance](https://moneywise.com/investing/stocks/best-stock-tracking-apps/). The major difference between the two is that when you purchase a stock, you’re buying ownership in a single company. When you buy shares in an ETF, you’re purchasing many underlying assets. \| Feature \| ETF \| Stock \| \|---\|---\|---\| \| Type of investor \| All investors \| Experienced investors \| \| Number of assets \| Many \| One \| \| Best uses \| Long-term and diverse portfolios \| Granular, strategic investment strategies \| \| Management fees \| Fees typically apply \| No management fees \| \| Trade times \| Near-instant \| Near-instant \| \| Typical trade commission \| Commission-free \| Commission-free \| ## What is the difference between ETF and a mutual fund? ETFs and mutual funds are both investment vehicles designed to hold many underlying investments. When you buy shares in these funds, you’re investing in each of its underlying assets. Both can specialize in different asset classes, sectors and styles, and both can be an effective way of diversifying your portfolio. \| Feature \| ETF \| Mutual fund \| \|---\|---\|---\| \| Trading \| Traded throughout the day on exchanges. \| Traded once per day at the end of the trading day. \| \| Price \| Price fluctuates throughout the day based on market conditions. \| Price set at the end of the day based on the closing price. \| \| Management style \| Generally passively managed, designed to track an index. \| Usually actively managed, designed to beat the market. \| \| Fees \| Relatively low management fees. \| Higher management fees due to active management. \| ## Are ETFs a good investment? For the typical investor, ETFs are an excellent investment choice. The vast majority of my personal portfolio is in a variety of ETFs. When you’re investing for long-term goals like retirement or funding a college education, it’s tough to beat ETFs. ETFs are arguably the best way to invest for the average person because of its low fees, instant access to diversified portfolios and ability to quickly buy and sell. With a target date fund ETF or a mix of diversified stock and bond ETFs, you could find all of your investment needs met with only a few ETFs. ### Pros and cons of ETFs Pros - Diversification: ETFs make it easy to invest in many underlying securities across different asset classes, therefore reducing your exposure risk. - Low management fees: Because most ETFs are passively managed, they have lower management fees than a typical mutual fund. - Easy to trade: ETFs trade on major exchanges throughout the day, just like stocks. As a result, you get real-time pricing without waiting until the end of the day. - Tax efficiency: Mutual fund investors may pay capital gains taxes while they still hold their shares, while ETF investors don’t pay taxes until they sell their investment. Cons - Possible trading fees: Depending on the brokerage firm you use, you might pay commissions or trading fees when buying or selling ETF shares. - Illiquidity: Some ETFs can be relatively illiquid, meaning you may have a difficult time selling at the price you would hope. - Management fees: Most ETFs are passively managed, resulting in low management fees. But if you’re not paying attention, you could inadvertently invest in an actively managed fund and pay a higher management fee than you expect. ## FAQs - ### What is an ETF and how does it work? [\+](https://moneywise.com/investing/what-is-an-etf) An ETF is an investment fund that allows you to buy multiple stocks, bonds, or other investments with a single purchase. ETFs pool investor assets, allowing investors to buy hundreds or even thousands of stocks at once. - ### Are ETFs a good investment for beginners? [\+](https://moneywise.com/investing/what-is-an-etf) Yes, ETFs are a good investment option for beginners because they offer built-in diversification, low fees and are easy to trade. - ### What is the downside of ETFs? [\+](https://moneywise.com/investing/what-is-an-etf) ETFs require paying fees to the fund manager and can make your investments more difficult to understand. Because you’re buying many stocks at once with many ETFs, it’s harder to keep track of the underlying stocks than when buying single stocks. - ### Are ETFs safer than stocks? [\+](https://moneywise.com/investing/what-is-an-etf) ETFs are generally less risky than individual stocks because they spread your investments across many assets, but they can still lose value. - ### Sources [\+](https://moneywise.com/investing/what-is-an-etf) 1\. Finra: [Market Caps Explained](https://www.finra.org/investors/insights/market-cap) ![](https://media1.moneywise.com/avatars/eric-rosenberg-1685476328.jpg) [Eric Rosenberg](https://moneywise.com/author/eric-rosenberg) Contributor ![](https://media1.moneywise.com/avatars/eric-rosenberg-1685476328.jpg) [Eric Rosenberg](https://moneywise.com/author/eric-rosenberg) Contributor Eric Rosenberg is a finance, travel and technology writer in Ventura, California. 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Readable Markdown	An ETF, or exchange-traded fund, is a popular investment fund that allow investors to diversify their portfolios with the flexibility of trading throughout the day. While ETFs come in various forms, they all share the same basic characteristics. These funds can be a great addition to any portfolio, but it's essential to understand how they work before diving in. ![](https://media1.moneywise.com/icons/topics/info-option.svg) - ETFs bundle multiple assets into one investment, making it easy to diversify your portfolio. - ETFs trade like stocks, so you can buy and sell throughout the day at market prices. ## What is an ETF? An ETF is an investment vehicle that bundles many securities into a single investment. ETFs are designed to track the price of their underlying assets, which can include stocks, bonds, commodities, and more. Unlike [mutual funds](https://moneywise.com/investing/what-are-mutual-funds-what-got-them-so-popular-among-investors/) or index funds, ETFs are traded on stock exchanges throughout the day, just like individual stocks. That means investors can buy and sell them at market prices during trading hours. When you invest in an ETF, you don't directly own the underlying assets. Instead, you own shares in the fund itself, which represents a portion of its total holdings. An ETF (exchange-traded fund) is an investment fund that holds a diversified portfolio of assets and trades on an exchange like a stock, allowing investors to gain broad market exposure with a single investment. ## How do ETFs work? A fund provider creates an ETF by purchasing a collection of assets, such as stocks, bonds, or commodities. Then, a fund is designed by tracking the performance of those assets. Investors can then buy shares of the ETF on the stock exchange. ETFs combine the benefits of both mutual funds and stocks. How? - First, like mutual funds, ETFs are an easy way to diversify your portfolio because they follow many underlying assets and combine them into a single basket. - When you invest in an ETF, you are exposed to all of the investments within the basket. This diversification helps to mitigate the risks from any individual security. - ETFs also have one of the key benefits of stock in that they can be traded throughout the day anytime the exchanges are open. If you decide you want to buy or sell shares of an ETF, you don’t have to wait until the end of the day. You can complete the transaction immediately. ## What is the difference between ETF and a stock? ETFs and stocks have one very important characteristic in common: both trade on major stock exchanges, so you can buy and sell whenever the exchange is open. Just like stocks, ETFs have their own ticket symbols so you can [track their performance](https://moneywise.com/investing/stocks/best-stock-tracking-apps/). The major difference between the two is that when you purchase a stock, you’re buying ownership in a single company. When you buy shares in an ETF, you’re purchasing many underlying assets. \| Feature \| ETF \| Stock \| \|---\|---\|---\| \| Type of investor \| All investors \| Experienced investors \| \| Number of assets \| Many \| One \| \| Best uses \| Long-term and diverse portfolios \| Granular, strategic investment strategies \| \| Management fees \| Fees typically apply \| No management fees \| \| Trade times \| Near-instant \| Near-instant \| \| Typical trade commission \| Commission-free \| Commission-free \| ## What is the difference between ETF and a mutual fund? ETFs and mutual funds are both investment vehicles designed to hold many underlying investments. When you buy shares in these funds, you’re investing in each of its underlying assets. Both can specialize in different asset classes, sectors and styles, and both can be an effective way of diversifying your portfolio. \| Feature \| ETF \| Mutual fund \| \|---\|---\|---\| \| Trading \| Traded throughout the day on exchanges. \| Traded once per day at the end of the trading day. \| \| Price \| Price fluctuates throughout the day based on market conditions. \| Price set at the end of the day based on the closing price. \| \| Management style \| Generally passively managed, designed to track an index. \| Usually actively managed, designed to beat the market. \| \| Fees \| Relatively low management fees. \| Higher management fees due to active management. \| ## Are ETFs a good investment? For the typical investor, ETFs are an excellent investment choice. The vast majority of my personal portfolio is in a variety of ETFs. When you’re investing for long-term goals like retirement or funding a college education, it’s tough to beat ETFs. ETFs are arguably the best way to invest for the average person because of its low fees, instant access to diversified portfolios and ability to quickly buy and sell. With a target date fund ETF or a mix of diversified stock and bond ETFs, you could find all of your investment needs met with only a few ETFs. ### Pros and cons of ETFs Pros - Diversification: ETFs make it easy to invest in many underlying securities across different asset classes, therefore reducing your exposure risk. - Low management fees: Because most ETFs are passively managed, they have lower management fees than a typical mutual fund. - Easy to trade: ETFs trade on major exchanges throughout the day, just like stocks. As a result, you get real-time pricing without waiting until the end of the day. - Tax efficiency: Mutual fund investors may pay capital gains taxes while they still hold their shares, while ETF investors don’t pay taxes until they sell their investment. Cons - Possible trading fees: Depending on the brokerage firm you use, you might pay commissions or trading fees when buying or selling ETF shares. - Illiquidity: Some ETFs can be relatively illiquid, meaning you may have a difficult time selling at the price you would hope. - Management fees: Most ETFs are passively managed, resulting in low management fees. But if you’re not paying attention, you could inadvertently invest in an actively managed fund and pay a higher management fee than you expect. ## FAQs - ### What is an ETF and how does it work? [\+](https://moneywise.com/investing/what-is-an-etf) An ETF is an investment fund that allows you to buy multiple stocks, bonds, or other investments with a single purchase. ETFs pool investor assets, allowing investors to buy hundreds or even thousands of stocks at once. - ### Are ETFs a good investment for beginners? [\+](https://moneywise.com/investing/what-is-an-etf) Yes, ETFs are a good investment option for beginners because they offer built-in diversification, low fees and are easy to trade. - ### What is the downside of ETFs? [\+](https://moneywise.com/investing/what-is-an-etf) ETFs require paying fees to the fund manager and can make your investments more difficult to understand. Because you’re buying many stocks at once with many ETFs, it’s harder to keep track of the underlying stocks than when buying single stocks. - ### Are ETFs safer than stocks? [\+](https://moneywise.com/investing/what-is-an-etf) ETFs are generally less risky than individual stocks because they spread your investments across many assets, but they can still lose value. Eric Rosenberg is a finance, travel and technology writer in Ventura, California. He is a former bank manager and corporate finance and accounting professional who left his day job in 2016 to take his online side hustle full time. ## Latest Articles #### Disclaimer The content provided on Moneywise is information to help users become financially literate. It is neither investment, tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities, enter into any loan, mortgage or insurance agreements or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website. †Terms and Conditions apply.
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