ETFs: An entire market in a single investment.

An ETF (Exchange-Traded Fund) is an investment fund designed to track the performance of a variety of assets, such as indexes, bonds, commodities, and more.

ETFs are well-known financial instruments among investors because they offer several advantages.

One of their main benefits is diversification.

ETFs can hold a large number of underlying assets, allowing investors to spread risk within their investment portfolio using just one financial instrument. Moreover, ETFs generally have lower costs compared to buying individual assets, both in terms of purchase price and trading commissions.

Another key feature of ETFs is liquidity, as they can be easily bought and sold on the market, just like stocks.

There are different types of ETFs, and one of the first classifications divides them into two broad categories:

Actively Managed ETFs: Managed by professional investors aiming to outperform the market, also they require more frequent trading to adapt to market conditions. Generally more expensive due to higher management fees.

Passively Managed ETFs: Designed to track a specific index or asset class. Involve minimal trading activity and lower fees compared to active ETFs. They are suitable for long-term investors seeking broad market exposure.