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Which are some things I need to know as an ETF investor?


Mary S

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Hi Mary,

Exchange-traded funds have become popular because of the many benefits their investors relative to other financial investment options.

They have influenced the investors and other persons taking part in it to control their portfolios hence making their fees less effectively and their taxes more efficient. As simple as these ETFs may seem, they are, at times, complex.

One thing you should know as an ETF investor is that their taxes are efficient. Their capital gains usually are lower, unlike other mutual funds, mainly due to the creation/ redemption mechanism.

You may be interested in dealing with Dividend ETFs. However, before you sell them, you need to know that the Dividend ETFs may not necessarily give you high dividends.

You also need to know that leveraged ETFs are of many different types. These ETFs may depend on the reset frequency, which helps earn you earn high returns.

Although ETFs are termed as cost-efficient, you need to know that not all of them are cheap. Also, in some ETFs, you don't have to pay commissions; hence they may be better investment options for you.

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