
Understanding Exchange-Traded Funds (ETFs)
Exchange-Traded Funds (ETFs) have gained immense popularity among investors due to their flexibility, cost-effectiveness, and diversification benefits. ETFs are investment funds that hold a collection of assets such as stocks, bonds, or commodities and trade on an exchange similar to stocks.
Benefits of ETFs
ETFs provide several advantages for investors. One of the key benefits is diversification, as they offer exposure to a broad range of securities, reducing the risk associated with investing in a single asset. Additionally, ETFs are highly liquid since they are traded throughout the day on stock exchanges at market prices, unlike mutual funds that settle at the end of the trading day.