Self Mentor

-4. Exchange Traded Funds (ETFs)

An exchange-traded fund (ETF) is generally seen as one of the best low-risk investments you can have! In many ways, they are similar to index funds, with some ETFs owning index funds. ETFs are funds that own a series of securities. Sometimes, these are stocks, bonds, real estate, and gold all thrown in together. Other times, these are just stocks from a specific industry, or just stocks and bonds.

As with other investments, ETFs are attractable due to their inherent diversification benefits. ETFs are also extremely low cost, whilst yielding fairly high ROIs, as well as being tax-deductible (sometimes).

ETFs also bring in income. Depending on the type of ETF you’ve bought, you may receive payments in the form of dividends and/or interest. As you own a percentage of the ETF, if it were to enter liquidation, you would receive a payout (based on the leftovers).