Click here to read the full Fidelity Viewpoints article.
Learn the basics—including the benefits and risks—of exchange-traded funds.
Once upon a time, exchange-traded products (ETPs)—which are comprised mostly of exchange-traded funds (ETFs) and a much smaller percentage of exchange-traded notes (ETNs)—were the new kid on the investment block. Not anymore.
You can choose from 2,955 different ETFs/ETPs (including leveraged and inverse), with assets just over $7 trillion as of May 31, 2022 (per Bloomberg). And while the early ETFs tracked broad market indexes like the S&P 500® Index, now there are ETFs focused on virtually every imaginable corner of the market—from health care to solar energy, from Treasury bonds to emerging market debt, from commodities to currencies, and from Turkey to Thailand. You can also find style-based ETFs focused on growth, value, or capitalization, or theme-based ETFs, such as those aimed at green or socially responsible investors.
But like any investment vehicle, ETFs have risks along with potential rewards. So, how exactly do they work? What are their pros and cons? And how might they fit into your investment style and strategy?
Click here to read the full Fidelity Viewpoints article.
TC134551(0723)1