Finance

ETFs and Index Funds

Owning the whole market for a few basis points.

An index fund tracks a basket like the S&P 500 instead of trying to beat it. An ETF is the exchange-traded wrapper — it trades like a stock all day.

Fees compound too. A 1% expense ratio versus 0.03% costs roughly a quarter of your final balance over 30 years.

Most active funds underperform their index after fees over long periods, which is why indexing became the default core holding.