Investors have been piling more money into exchange-traded funds. ETF assets topped $10 trillion for the first time in November, according to Cerulli Associates, and as of June, now total $13.74 trillion, Hightower Advisors found.
Just as with other investments, it’s smart to have a strategy for ETF purchases, experts say.
Similar to mutual funds, an exchange-traded fund is a basket of securities that closely track a broad index. Part of ETFs’ attraction for new investors is lower associated costs and tax advantages, said Gloria Garcia Cisneros, a certified financial planner at LourdMurray, an investment and wealth management firm.
“The best thing about the ETF is that it’s not like old school mutual funds,” said Garcia Cisneros.
They also offer more flexibility. For instance, ETFs can be bought and sold throughout the day and during extended hours. Mutual funds can only be traded once a day after the market closes.
