Myth: ETFs Have High Spreads.
Fact: ETF spreads reflect the cost of acquiring the portfolio.
Spreads in ETFs often reflect the underlying liquidity of the securities they track. For ETFs that focus on highly liquid assets, such as large-cap equities, spreads are typically very narrow. Conversely, ETFs that track less liquid markets, such as emerging markets or niche sectors, may have wider spreads, but this mirrors the costs and risks of trading the underlying securities. Generally, investors should be prepared to pay the offer price when buying an ETF and accept the bid price when selling it.
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