One of the number one rules of investing is that you should understand what you’re investing in. If you’re looking to start investing and have heard that you should be investing in ETFs or index funds and not really understand what they are, then this is the video for you.
In this video I’ll explain what an ETF is and the benefits of investing in them. Later on in the video I’ll also go through some of the ETFs I’m personally invested in and briefly explain why they might be good options for you.
ETF stands for Exchange Traded fund. It’s essentially an investment fund that is traded on a stock exchange. But what does that mean?
An ETF is a basket of stocks that track a single industry or sector. So if you want to start investing rather than having to invest in lots of different individual stocks and shares to create an investment portfolio you can simply invest in one or more ETFs. We will cover some more specific examples later in the video but to give you a bit more detail on this let’s look at a popular S&P500 ETF.
So you can invest in Vanguard’s S&P 500 VUSA and by doing so you are getting a slice of the 500 top companies in the US. So if you invest in this ETF your portfolio is going to be made up wholly of stocks from the United States. The top 6 biggest holdings within this ETF are Apple, Microsoft, Amazon, Nvidia, Alphabet, and Meta platforms and then as there is currently 506 holding in this ETF you’ll also have a slice of an additional 500 companies including other companies like TESLA and Berkshire Hathaway.
There are 4 main benefits/ pros of investing in an ETF and they are:
Low cost (VUSA 0.07%)
Diverse (Level out any peaks and troughs, could invest in a world ETF)
Passively managed
Can buy small amounts of them (Don’t have to shell out $200 on a single share of apple, for example)
You can buy a wide range of ETFs on most investment platforms. I personally hold ETFs in my Investment ISA and my Self Invested Personal Pension (SIPP) because these are tax efficient places to hold them.
ETFs for specific countries or sectors.
As I said previously you can invest in an ETF for a specific country, region or sector so I’m going to give you some examples of different ETFs I’m currently invested.
Vanguard S&P 500 VUSA Fee 0.07% 5yr annualised 15.31%
IITU iShares S&P 500 Information Technology Sector Fee 0.15% 5 yr annualised 27.51%
iShares Core MSCI World UCITS ETF SWDA 0.2% 12.59%
iShares MSCI USA SRI UCITS ETF SUUS fee 0.2% 5 yr annualised 16.42%
L&G Battery Value-Chain BATG fee 0.49% 5 yr annualised 15.55%
Investing Qualifications I hold:
International Certificate in Wealth and Investment Management (Chartered Institute for Securities & Investment)
***Books I've Enjoyed***
How to Own the World by Andrew Craig: [ Ссылка ]
The Psychology of Money by Morgan Housel: [ Ссылка ]
The Warren Buffett Way by Robert Hagstrom JR: [ Ссылка ]
Naked Trader by Robbie Burns: [ Ссылка ]
The Little Book of Common Sense Investing by John Bogle: [ Ссылка ]
I make videos on investing, personal finance, growing wealth, financial independence, budgeting and saving money. Let me know in the comments what you’d like to see next!
DISCLAIMER
Any information given in this video is for entertainment purposes only, and does not act as legal or financial advice. Your financial decisions are your own responsibility, and if you do require advice please contact a qualified Financial Adviser, Wealth Manager or Financial Planner.
