ETFs Explained: What an Exchange-Traded Fund Is and How It Works

An ETF (exchange-traded fund) is a low-cost investment that lets you own a slice of many companies at once. The most popular example is an S&P 500 ETF, which gives you exposure to roughly 500 major US companies in a single purchase. In this episode, Ryan explains what makes ETFs different from mutual funds: they are generally passively managed, the average expense ratio is around 0.16%, you get intraday trading, and you keep control over your own tax situation.Ryan covers the main cons too, including that lower cost sometimes means no active manager trying to outperform the market. He and Aaron discuss why ETFs have exploded in popularity since the 2008 financial crisis and what to look for when choosing one.Find "Your Fiscal Physical" the book on AmazonIf you have suggestions or feedback, please email us at: [email protected], as always, Stay the Course!