ETF education

We’re here to help you better understand investing in ETFs. Explore our resources below to learn more.
  • 0:49

    What is an ETF?

    Learn about the basics of ETFs and how they work.

    Transcript

    ETF is short for Exchange Traded Fund. ETF's track the performance of a particular stock market index like the S&P 500 or NASDAQ 100. ETF fund managers typically seek to mirror the indexes holdings and weightings. Giving investors broad exposure to a specific asset class or market sector. Owning ETF shares can help provide you with investment diversification, potentially helping to manage your overall investment risk. And there are many other important benefits that ETF can offer. Want to learn more? Check out our other videos.

    Before investing consider the funds investment objectives, risks, charges, and expenses. Visit invesco.com for a prospectus with this information. Read it carefully before investing.
  • 1:11

    What are the advantages of an ETF?

    Explore ways ETFs can potentially add value to an investment portfolio.

    Transcript

    Thinking about investing in an exchange-traded fund or ETF? Let's take a closer look at five potential ETF benefits that may help you decide. First, ETF's tend to cost less than other funds. In 2021 the average ETF cost less than 1/2 of the cost of a comparable mutual fund. Those savings can really add up overtime. ETF's are also easy to buy and sell. Just like stocks, you can trade them on a number of exchanges whenever markets are open and they're transparent. You can see the prices of ETF's in real time and know exactly what securities they're holding on a daily basis. ETFs can give you control over which sectors you invest in so your portfolio reflects what's most important to you. And most ETF's are tax- efficient, many ETF's do not have annual capital gains distributions and typically defer capital gains until you sell your shares. Want to learn more? Check out our other videos.

    Before investing consider the funds investment objectives, risks, charges, and expenses. Visit invesco.com for a prospectus with this information. Read it carefully before investing.
  • 1:10

    ETFs vs Mutual Funds?

    Discover how to access ETFs and ways they help to simplify the investing process.

    Transcript

    How do exchange-traded funds or ETFs compare to mutual funds? Much like mutual funds ETF can offer you a quick and easy way to help build a diversified professionally managed portfolio. By pooling your funds with other individuals you're able to purchase a broad basket of securities through a single investment. Both give you a wide range of investment choices and because many ETF's passively track a market index, much like the index mutual funds, they're typically able to charge lower fees than other more actively managed investments. But ETF's may also deliver certain advantages that most mutual funds often can't provide like simple pricing. You don't have to choose between multiple share classes with different fee structures, investment minimums, and redemption rules. There's only one type of ETF shares no investment minimums and no restrictions on buying and selling your shares whenever the markets are traded. Want to learn more? Check out our other videos.

    Before investing consider the funds investment objectives, risks, charges, and expenses. Visit invesco.com for a prospectus with this information. Read it carefully before investing.

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Frequently asked questions

Get answers to common ETF questions.

ETFs are created and redeemed “in-kind” by financial institutions and market makers called authorized participants (APs), typically consisting of 10,000, 20,000, 25,000, 50,000, 75,000, 80,000, 100,000, 150,000 or 200,000 shares known as creation units, based on supply and demand. The use of in-kind transactions rather than the cash transactions used by mutual funds is the key to ETFs’ tax efficiency.

ETFs provide exposure to almost any asset class, including stocks, bonds, commodities, currencies, sectors, private equity, and real estate. 

ETFs let investors get exposure to many geographic regions such as North America, Latin America, Europe, Asia-Pacific, the Middle East, and Africa.

There are ETFs covering the major economic sectors, including financials, industrials, technology, utilities, and health care. There are also industry-based ETFs that are more narrowly focused on subsectors such as banks, pharmaceuticals, energy exploration, and semiconductors. Finally, thematic ETFs are designed to target major economic themes such as clean energy, cybersecurity, artificial intelligence, and fintech.

Smart beta1 ETFs generally seek favorable risk-adjusted returns2 over a full market cycle based on alternative weighting methodologies such as equal weighting3, low volatility4, high dividends5, quality6, and other fundamental factors7.

How to invest in ETFs

Click below to explore ways to invest or view our wide range of ETF products.

How to invest

Established ETF provider

With over $440 billion in AUM and a global presence, we are an established provider in the ETF market.8

Diverse range of solutions

We have a diverse selection of forward-thinking ETFs with a history of first to market in smart beta.9

Client-oriented approach

We are committed to helping clients learn how to use ETFs effectively as they pursue their financial goals.

Explore ETF investing

  • 1

    Beta is a measure of risk representing how a security is expected to respond to general market movements. Smart Beta represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, both in active or passive vehicles. Smart beta funds may underperform cap-weighted benchmarks and increase portfolio risk.
  • 2

    Risk-adjusted returns are used in the context of a particular investment that has a favorable level of risk relative to its return versus another investment with potentially similar returns but more risk.
  • 3

    Equal weighting methodology consists of weighting each company within a specific index or strategy by the same amount. For example, if there are 500 companies in an index, under an equal weighting methodology, each company has a weight of 0.2% (1/500) in the index.
  • 4

    Volatility is a statistical measurement of the magnitude of up and down asset price fluctuations over time. Low volatility is the idea that investments that are labeled as such have potentially less downside loss potential versus investments that have higher volatility. There is no assurance that such ETFs will provide low volatility. There is no assurance that such ETFs will provide low volatility.
  • 5

    A dividend is a payment by a stock-issuing company to shareholders and is considered a source of return. Some investors find high dividends attractive as it may potentially add to their portfolio’s return potential.
  • 6

    Companies that issue quality stocks may experience lower than expected returns or may experience negative growth, as well as increased leverage, resulting in lower than expected or negative returns to Fund shareholders.
  • 7

    Factor investing (as known as smart beta or active quant) is an investment strategy in which securities are chosen based on certain characteristics and attributes that may explain differences in returns. Factor investing represents an alternative and selection index based methodology that seeks to outperform a benchmark or reduce portfolio risk, both in active or passive vehicles. There can be no assurance that performance will be enhanced or risk will be reduced for strategies that seek to provide exposure to certain factors. Exposure to such investment factors may detract from performance in some market environments, perhaps for extended periods. Factor investing may underperform cap-weighted benchmarks and increase portfolio risk.
  • 8

    Source: Invesco as of December 31, 2022.
  • 9

    The first smart beta ETF was Invesco S&P 500 Equal Weight ETF (RSP), as of 4/24/2003.