4 Problems With ETFs To Watch For

Exchange Traded Funds (ETFs) are certainly one of the best financial innovations to hit main street since mutual funds and retail online brokers. ETFs combine all the benefits of stock trading like instant execution, liquidity, and low fees with the diversification that mutual funds offer. It offers a great way to form a diverse portfolio through the use of passive investing. Additionally, there are now hundreds of different sectors, strategies, commodities, and asset classes to choose from. While these benefits are certainly great, retail investors need to also need to recognize some subtle risks that aren’t often widely publicized. Investors often start investing in a new ETF without fully understanding the actual objective or likely performance of the instrument in comparison to the desired benchmark. Here are four key pitfalls to watch for:

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