What is an ETF? How do they work? And why do they beat Active Fund Managers? #finance #investing

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In this information packed episode, we explore ETFs or ‘Exchange Traded Funds’ in some detail. We’ll also take a look at how passive ETFs often outperform their more expensive, actively managed counterparts.

We’ll take a look at what an ETF is, ‘Exchange Traded Commodities’ (or ‘ETCs’) and why they are popular investment vehicles for investors of all stripes.

Following this, we’ll take a look under the bonnet of ETFs to get a better understand of how they are arranged, including physical ETFs, Synthetic ETFs and a quick look at ETF ‘Optimisation’.

We’ll finish by covering the downside of ETFs, and how active managed funds still have a place in modern investment portfolios, despite their underperformance.

This video, and our channel, aims to make the often-complex world of finance simple and understandable for everyone. For a transcript of this video, along with further reading and guidance, visit our learning portal here:

If you’re considering investment options, or wish to discuss any other areas of finance, don’t hesitate to leave us a comment or get in touch directly via Xenia.

00:00 Introduction
01:21 What is an ETF?
02:30 Why are ETFs popular?
04:28 How do ETFs work?
06:09 The downside of ETFs
07:58 Why do ETFs outperform Actively Managed Funds?
09:53 Conclusion

No financial decisions should be taken based on the content of this video. The guidance contained within this video is subject to the UK regulatory regime and is therefore primarily aimed at viewers in the UK. Always take full individual advice first. Regulations and legislation governing taxation, investments and pensions may change in the future.

The content in this video is accurate as of the 2024-25 tax year.

#money #wealth #financialplanning