ETF or Exchange-Traded Fund is an investment fund that provides you with many benefits and is a great vehicle for achieving your investment goals.
In short, an ETF is a set of securities of specific companies or even entire industries that you can buy or sell on the stock exchange in one trade!
Why are ETFs convenient?
You can immediately buy a ready-made portfolio of securities, which is monitored by professional investment managers.
How it works?
You want to make a salad, but you don't have the resources or time to find all the ingredients yourself. ETF will do this for you: it will buy all the necessary products, add them in the right quantities and collect them into one plate - you will receive a ready-made portfolio of everything you needed.
For example, let's say you buy the S&P 500 SPDR fund (ticker: SPY). This way, your investment automatically covers the entire S&P 500 index, that is, the shares of the 500 largest US companies. Now, as each of them increases, the price of your portfolio will also increase accordingly.
Pros of ETFs
+ accessibility for rookies;
+ similarity to common stocks;
+ low price;
+ savings on brokerage commissions;
+ high-quality distribution of funds and risks.
In the Freedom Broker application, you can find the latest selections of the best U.S. and European ETF funds, to do this, go to the Portfolio → What to buy section.
You can find detailed information on ETF funds on our blog.