Today’s question is, what is an ETF?
ETF stands for Exchange-Traded Fund. An Exchange-Traded Fund is a mutual fund, but what we traditionally think of as a “mutual fund” is called an open-end mutual fund. An ETF is a modern version of it, and structurally it’s a little bit different.
Mainly, what makes it different is that it tracks an index, so it’s more of a passive investing philosophy. You can get very narrow and granular in terms of what indexes to track and creating an overall diversified investment strategy. One of the byproducts of just simply tracking an index, is that the internal costs are very, very low.
People very often forget that mutual funds have internal costs. That doesn’t necessarily make it bad, but you don’t necessarily see the costs. Compared to a traditional open-end mutual fund, an Exchange-Traded Fund is most often going to have much lower internal expenses, and that’s what makes it modern and in many cases, better. It’s not to say that in no circumstances a traditional open-end mutual fund would be used. I mean, there are certain circumstances where that could possibly make sense over an ETF.
“We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”
“We’ve been clients of Johnson-Brunetti for > 10 years. We’re enjoying a comfortable retirement as a result. Many thanks to Joel and our CFP, Eric Hogarth. I wish we had plugged into this decade approach back when we were in our 30s.”
“Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”
“I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “
“Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”
“I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”
Investment Advisory Services offered through JB Capital, LLC.
Insurance Products offered through JN Financial, LLC.
Atlanta • Boston • Hartford | Tel: 800-208-7233
JB Capital LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.
Johnson Brunetti is a sponsor of WFSB Better Money, WCVB Better Money Boston, WSB-TV Better Money Atlanta, WTNH Money Wisdom, and WTIC Money Wisdom.