Exploring Exchange-Traded Funds (ETFs): How They Work and Their Advantages
Introduction
Exchange-Traded Funds (ETFs) are investment vehicles that combine the features of stocks and bonds, allowing investors to diversify their portfolio while enjoying the benefits of both asset classes. In this article, we will explore the concept of ETFs, how they work, and the advantages they offer to investors.
What are ETFs?
ETFs are investment funds that trade on stock exchanges, similar to individual stocks. They are designed to track the performance of a particular index, sector, or asset class. These funds can hold a variety of underlying assets, including stocks, bonds, commodities, or a combination of these.