Exploring Faith-Based ETFs With Brian Mumbert

There’s a great investing option out there, and chances are, it’s not in your portfolio.

That option is Exchange-Traded Funds or ETFs, and they’re worth considering. Brian Mumbert joins us today to discuss the advantages of ETFs.

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment option similar to a mutual fund but with distinct features. ETFs typically follow an index, such as the S&P 500 or NASDAQ, and are not actively managed. This means that an ETF holds a broad mix of investments, providing diversification that tracks the chosen index. One key advantage is that ETFs, like stocks, can be traded throughout the day, allowing investors to buy or sell at the current market price.

How Do ETFs Differ from Mutual Funds?

Unlike mutual funds, where the exact purchase price isn’t known until the end of the trading day, ETFs offer real-time pricing. This flexibility allows investors to trade whenever they choose during market hours. Additionally, mutual funds may pass on capital gains taxes to investors due to asset sales by fund managers, but ETFs generally avoid this by trading “baskets” of stocks, potentially reducing tax liability.

Transparency and Tax Advantages

ETFs offer high transparency, with daily disclosures of their holdings. This transparency is a significant benefit for investors who prioritize clarity in where their money goes. Tax advantages are another key feature; ETFs often avoid capital gains taxes, which can be passed on to mutual fund holders, especially during high turnover periods.