ETFs explained – ETFs simplified | iShares – BlackRock (2024)

This material is prepared by BlackRock (Singapore) Limited (co. registration no. 200010143N) for informational or educational purposes only. This does not constitute an offer or solicitation to purchase or sell in any securities or iShares Funds, nor shall any securities be offered or sold to any person in any jurisdiction in which an offer, solicitation, purchase or sale would be unlawful under the securities laws of such jurisdiction.

There are risks associated with investing, including loss of principal. The value of investments involving exposure to foreign currencies can be affected by exchange rate movements. Investment in emerging market countries may involve heightened risks such as increased volatility and lower trading volume, and may be subject to a greater risk of loss than investments in a developed country. Investors should be aware that the price of shares of the iShares Funds, and the income from them (if any), may fall as well as rise, and investors may not get back their original investment. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. iShares Funds are not sponsored, endorsed, issued, sold or promoted by their index providers. For details of the index provider including any disclaimer, please refer to the relevant iShares Fund offer document.

This material contains general information only and is not intended to represent general or specific investment advice. The information does not take into account your financial circ*mstances. An assessment should be made as to whether the information is appropriate for you having regard to your objectives, financial situation and needs. Before investing, you should carefully consider the investment objectives, risks, charges and expenses and all other information contained in the relevant offering documents which is available from BlackRock or the iShares websites.

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns. This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. There is no guarantee that any forecasts made will come to pass. Reliance upon information in this material is at the sole discretion of the reader.

The opinions expressed are as of October 2021 and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non proprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy. They do not necessarily reflect the views of any company in the BlackRock Group or any part thereof and no assurances are made as to their accuracy. No part of this material may be reproduced, stored in retrieval system or transmitted in any form or by any means, electronic, mechanical, recording or distributed without the prior written consent of BlackRock.

The information provided here is not intended to constitute financial, tax, legal or accounting advice. You should consult your own advisers on such matters.

iShares® and BlackRock® are registered trademarks of BlackRock, Inc., or its subsidiaries in the United States and elsewhere. All other trademarks, servicemarks or registered trademarks are the property of their respective owners.

© 2021 BlackRock Inc. All rights reserved.

MKTGH1023A/S-3173713

ETFs explained – ETFs simplified | iShares – BlackRock (2024)

FAQs

ETFs explained – ETFs simplified | iShares – BlackRock? ›

ETFs combine certain key features of stocks and managed funds. ETFs are more diverse than investing in individual stocks. Instead of buying a handful of individual stocks, investing in an ETF would give you instant exposure to a multitude of stocks.

What is a simple way to explain ETF? ›

ETFs or "exchange-traded funds" are exactly as the name implies: funds that trade on exchanges, generally tracking a specific index. When you invest in an ETF, you get a bundle of assets you can buy and sell during market hours—potentially lowering your risk and exposure, while helping to diversify your portfolio.

How many ETFs is enough? ›

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification.

Which ETF gives the highest return? ›

Top 6 ETF mutual funds with up to 110% returns in 1 year
  • 1/6. CPSE ETF. The fund at the top has given 109.22% returns in the 1-year period. ...
  • 2/6. Motilal Oswal S&P BSE Enhanced Value ETF. ...
  • 3/6. ICICI Pru Nifty PSU Bank ETF. ...
  • 4/6. Kotak Nifty PSU Bank ETF. ...
  • 5/6. Nippon India ETF Nifty PSU Bank BeES. ...
  • 6/6. Kotak Nifty Alpha 50 ETF.
May 2, 2024

Is it smart to only invest in ETFs? ›

ETFs make a great pick for many investors who are starting out as well as for those who simply don't want to do all the legwork required to own individual stocks. Though it's possible to find the big winners among individual stocks, you have strong odds of doing well consistently with ETFs.

What is an ETF in layman's terms? ›

An ETF, or Exchange Traded Fund is a simple and easy way to get access to investment markets. It is a pre-defined basket of bonds, stocks or commodities that we wrap into a fund and then we list onto the exchange so that everyone can use it.

Why ETFs are good for beginners? ›

They can be especially valuable to beginning investors. That's because they won't require the time, effort, and experience needed to research individual stocks. The cost to own an ETF may be lower than the cost to buy a diversified selection of individual stocks, too.

Is 7 ETFs too many? ›

Generally speaking, fewer than 10 ETFs are likely enough to diversify your portfolio, but this will vary depending on your financial goals, ranging from retirement savings to income generation.

Is 10 ETFs too much? ›

"You can get broad-based diversification with one ETF, commonly referred to as diversified ETFs, or you can build a portfolio of five to 10 ETFs that would offer good diversification," he says. The choice you make on the above depends on your investment goals and risk appetite, like any investment.

How many S&P 500 ETFs should I buy? ›

SPY, VOO and IVV are among the most popular S&P 500 ETFs. These three S&P 500 ETFs are quite similar, but may sometimes diverge in terms of costs or daily returns. Investors generally only need one S&P 500 ETF.

What is the number 1 ETF to buy? ›

Top U.S. market-cap index ETFs
Fund (ticker)YTD performance5-year performance
Vanguard S&P 500 ETF (VOO)11.1 percent15.5 percent
SPDR S&P 500 ETF Trust (SPY)11.0 percent15.4 percent
iShares Core S&P 500 ETF (IVV)10.3 percent15.3 percent
Invesco QQQ Trust (QQQ)11.6 percent21.8 percent

What is the safest ETF? ›

Vanguard S&P 500 ETF

Exchange-traded funds (ETFs) are one of the safer types of investments out there, as they require less effort than investing in individual stocks while also increasing diversification.

What ETF pays the highest monthly dividend? ›

Top 100 Highest Dividend Yield ETFs
SymbolNameDividend Yield
NVDQT-Rex 2X Inverse NVIDIA Daily Target ETF101.59%
TSLGraniteShares 1.25x Long Tesla Daily ETF98.77%
CONYYieldMax COIN Option Income Strategy ETF63.51%
KLIPKraneShares China Internet and Covered Call Strategy ETF57.87%
93 more rows

What is the downside to an ETF? ›

ETFs are designed to track the market, not to beat it

But many ETFs track a benchmarking index, which means the fund often won't outperform the underlying assets in the index. Investors who are looking to beat the market (potentially a riskier approach) may choose to look at other products and services.

Is it safe to put all your money in an ETF? ›

Key Takeaways

ETFs are less risky than individual stocks because they are diversified funds. Their investors also benefit from very low fees. Still, there are unique risks to some ETFs, including a lack of diversification and tax exposure.

Can an ETF go to zero? ›

For most standard, unleveraged ETFs that track an index, the maximum you can theoretically lose is the amount you invested, driving your investment value to zero. However, it's rare for broad-market ETFs to go to zero unless the entire market or sector it tracks collapses entirely.

How do you explain ETF to a child? ›

ETFs provide broad diversification by only needing to purchase a small number of securities. In contrast, when buying and holding hundreds of individual securities to achieve a similar level of diversification, greater costs are incurred in brokerage and fees – imagine the brokerage to buy 200 individual stocks!

How does ETF work example? ›

For example, if you own an ETF with an expense ratio of 0.09%, your share of the fund's fees is $9 for every $10,000 invested. But these fees do not come out of your pocket. So, if the fund returned 10% before fees, the return received by shareholders would be 9.91%.

How is ETF different from stocks for beginners? ›

Key differences between stocks and ETFs

Stocks represent a piece of ownership in a publicly traded company. ETFs are a bundle of assets and securities such as different stocks and bonds. A single ETF can contain dozens or hundreds of different stocks, or bonds or almost anything else considered an investable asset.

What is the difference between a mutual fund and an ETF for dummies? ›

Mutual funds are usually actively managed, although passively-managed index funds have become more popular. ETFs are usually passively managed and track a market index or sector sub-index. ETFs can be bought and sold just like stocks, while mutual funds can only be purchased at the end of each trading day.

Top Articles
Latest Posts
Article information

Author: Edmund Hettinger DC

Last Updated:

Views: 6043

Rating: 4.8 / 5 (78 voted)

Reviews: 85% of readers found this page helpful

Author information

Name: Edmund Hettinger DC

Birthday: 1994-08-17

Address: 2033 Gerhold Pine, Port Jocelyn, VA 12101-5654

Phone: +8524399971620

Job: Central Manufacturing Supervisor

Hobby: Jogging, Metalworking, Tai chi, Shopping, Puzzles, Rock climbing, Crocheting

Introduction: My name is Edmund Hettinger DC, I am a adventurous, colorful, gifted, determined, precious, open, colorful person who loves writing and wants to share my knowledge and understanding with you.