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Both offer advantages, but, as with any investment approach, there are also things to consider.

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

33 Icon Card, callout and clear background

ETFs or "Exchange-traded funds" are exactly as the name implies: funds that trade on exchanges, generally tracking a specific index. When you invest in an ETF, you get a bundle of assets you can buy and sell during market hours--potentially lowering your risk and exposure, while helping to diversify your portfolio.

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

33 Divide Icon card, callout and clear background

Your approach to ETF investing depends on what type of investor you are. At Schwab, we provide the help you need to build a strong ETF portfolio, whatever way you prefer to invest. 

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

  • balanced scale

    How they are most similar

    In most cases, both ETFs and mutual funds represent "baskets" of individual securities, for example stocks or bonds. 

33 Divide card and clear background

As with any investment, it's important to understand the underlying strategy of any ETF you're considering to ensure it aligns with your goals. Below are some key points to remember:

  • Commissions

    • Typically, you’ll pay a commission when you buy or sell an ETF, just like any exchange-traded security. 
    • Over time, those commissions can really add up and become cost prohibitive.
    • Not all brokers charge you a commission when you trade an ETF online. Always check before you trade.
  • Commissions

    • Typically, you’ll pay a commission when you buy or sell an ETF, just like any exchange-traded security. 
    • Over time, those commissions can really add up and become cost prohibitive.
    • Not all brokers charge you a commission when you trade an ETF online. Always check before you trade.
  • Commissions

    • Typically, you’ll pay a commission when you buy or sell an ETF, just like any exchange-traded security. 
    • Over time, those commissions can really add up and become cost prohibitive.
    • Not all brokers charge you a commission when you trade an ETF online. Always check before you trade.
  • Commissions

    • Typically, you’ll pay a commission when you buy or sell an ETF, just like any exchange-traded security. 
    • Over time, those commissions can really add up and become cost prohibitive.
    • Not all brokers charge you a commission when you trade an ETF online. Always check before you trade.
  • Commissions

    • Typically, you’ll pay a commission when you buy or sell an ETF, just like any exchange-traded security. 
    • Over time, those commissions can really add up and become cost prohibitive.
    • Not all brokers charge you a commission when you trade an ETF online. Always check before you trade.
  • Commissions

    • Typically, you’ll pay a commission when you buy or sell an ETF, just like any exchange-traded security. 
    • Over time, those commissions can really add up and become cost prohibitive.
    • Not all brokers charge you a commission when you trade an ETF online. Always check before you trade.

20 Icon card, with clear background

ETFs (exchange-traded funds) are increasingly popular investments for many reasons. Here are just a few:

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

25 Divide card and clear background

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

50 card, with stepped guide pros and cons

Sector ETFs have benefits that are enticing for almost any portfolio, but there are risks to consider before selecting such an ETF.

  • Pros

    Portfolio diversification

    An investor with a concentrated position in a single stock may want to avoid duplicating sector exposure with a total market fund. In this case, holding sector ETFs from other sectors may help to round out the portfolio.

  • Cons

    Impact of outside influences

    When outside influences (culture, government, economy, resources, etc.) experience a shift, that shift can have a negative impact on all the businesses within the sector. The result is increased volatility. 

50 Card, with clear background

  • Do it yourself

    Compass

    Create and monitor a portfolio and get help any time you need it.

  • Let a robo-advisor do it for you

    robo boat on autopilot

    Simplify the process of investing. Robo-advisors are online services that provide automated portfolios based on your preferences, using the latest technology and expertise from investment professionals.

50-Card-Clear (without images): At Schwab, every investor gets great service and a range of investment choices.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

Paenl: ETF or mutual fund? Which is right for you?

That all depends on your goals and the type of investor you are.

50 Card Clear (below panel): Consider an actively managed mutual fund if:

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

  • Health care ETFs

    Track indexes composed of companies engaged in the production and delivery of medicine and health care–related goods and services.

33 Card with ornament: ETFs at Schwab

We give you access to a wide variety of ETFs (Exchange-traded funds)—from low-cost Schwab ETFs for the core of your portfolio, to a broad selection of other ETF options—providing an exceptional degree of choice, offered in the most cost-effective ways possible.

  • Schwab ETFs™

    ETFs managed by Charles Schwab Investment Management

    Build the core of your portfolio

    • $0 online commissions
    • Low costs
  • Schwab ETF OneSource™

    ETFs from industry leading providers

    Broad selection

    • $0 online commissions
    • 250+ ETFs
  • All other ETFs

    Available on the U.S. Exchange

    Choose any for just

    • $4.95 online trade

test pros and cons

  • pros 1

    test 1

  • cons 1

    test 2

Tupac's Test Deck

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

  • person and file image

    Diversification

    ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities.

Deck-33 > Card-Ornament |Retail

Body for Deck-33 > Card-Ornament |Retail

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    • At Charles Schwab, we encourage everyone to take ownership of their financial life by asking questions and demanding transparency.
    • Our Insights & Ideas bring you information that fosters that ownership, because we believe that the best outcomes in life come from being fully engaged.

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  • Card with eyebrow and link

    Body field for card.

    • Open configuration options
    • At Charles Schwab, we encourage everyone to take ownership of their financial life by asking questions and demanding transparency.
    • Our Insights & Ideas bring you information that fosters that ownership, because we believe that the best outcomes in life come from being fully engaged.

    H3 for the Card

  • Card with eyebrow and link

    Body field for card.

    • Open configuration options
    • At Charles Schwab, we encourage everyone to take ownership of their financial life by asking questions and demanding transparency.
    • Our Insights & Ideas bring you information that fosters that ownership, because we believe that the best outcomes in life come from being fully engaged.

    H3 for the Card