ETF insights platform

Reality: Risk is driven by the assets you're investing in, not necessarily the vehicle used to access the assets.

Just like a mutual fund, the risk profile of an ETF is tied to its underlying holdings, or the assets it invests in: so a mutual fund and ETF that hold similar stocks or bonds will have similar risk profiles. For example, an international stock ETF or mutual fund may have higher risks than a U.S. investment grade corporate bond ETF. But that risk is not related to whether you choose to hold a mutual fund or an ETF.

On the flip side, an ETF offers greater diversification than an individual stock, which may help reduce risk in a portfolio.

Diversification and asset allocation may not fully protect you from market risk.

Reality: You can use ETFs for a wide range of exposures and outcomes.

ETFs are available across a wide range of exposures and investment strategies. They provide cost-efficient access to targeted markets, such as specific countries or sectors, as well as broad market benchmarks.

Combined with their typically high liquidity and ease of trading, ETFs enable investors to gain exposure to markets and asset classes that might otherwise be difficult or costly to access.

Whether seeking entry into less accessible international markets, establishing core portfolio allocations, or pursuing strategies designed to achieve specific investment outcomes, ETFs can serve as flexible and efficient building blocks within a diversified portfolio.

Reality: iShares ETFs offer a diverse set of solutions for income investing.

Generating income in a low-interest rate environment can be challenging. However, through exposures such as dividend-paying equities or fixed income securities, ETFs provide investors with a broad range of potential income-generating opportunities.

In addition, ETFs typically offer greater diversification than holding individual stocks or bonds, while often delivering this exposure at a lower cost than mutual funds.

Reality: ETFs are versatile investment vehicles appropriate for a wide range of investors.

While ETFs offer the same intraday trading flexibility as individual equities, making them useful tools for short-term tactical positioning, they are equally effective as cost-efficient building blocks for long-term, strategic portfolio construction.