What is an ETF? A Brief Explainer

From Morningstar:

Summary:
1. Ollie Smith is busy filming an explainer about ETFs, a type of investment vehicle. ETFs are essentially a collection of securities that reflect the performance of the underlying assets and can be bought and sold during the working day.

2. ETFs, or exchange-traded funds, are essentially a basket of securities that can mirror a specific index or be focused on a certain theme. They make thematic investing in various ideas easy and are available to everyday investors.

3. ETFs are listed on an exchange and their prices fluctuate according to market trends. They can track mainstream indices for diversification, but can also be fairly concentrated and susceptible to volatility.

4. The launch of Bitcoin ETFs in the US is an exciting development, but also comes with a fair amount of risk. Investors should seek professional advice before investing.



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