What are ETFs? A complete guide for beginners

ETFs are probably the best financial invention for everyday investors. Let's understand why.

What is an ETF?

ETF = Exchange Traded Fund

Imagine a fruit basket. Instead of buying a single banana (a stock), you buy a basket with hundreds of different fruits (an ETF).

Why they are brilliant

Types of ETFs

Global index ETFs:

Regional ETFs:

Thematic ETFs:

How to choose your first ETF

For beginners I recommend a single global ETF (VWCE or IWDA). The reasons:

Invest the same amount monthly and forget about it. Seriously.

What it costs

With an ETF at a 0.22% TER (Total Expense Ratio), like VWCE, you pay $2.20 per year for every $1,000 invested. Compare that with classic mutual funds that charge 1-2%.

Questions? I'm here to help!