"I'm of the view that passive and active investors alike can find value in owning exchange-traded funds (ETFs). Because there are more ETFs on the market today than individual stocks, there's a fund for every kind of investor. These highly diversified investing vehicles allow investors to purchase a stake in a wide range of companies, with portfolios that are automatically rebalanced based on certain criteria."
"The upside for investors is that they often are charged only a few basis points for the portfolio creation and rebalancing/turnover activity that takes place within these ETFs. Indeed, thinking back to the 1980s and 1990s where fund managers would often charge much higher fees for such services, that's an overall win for the investing public. Why? Well, compounding one's returns year after year is great, but fees can eat into a significant percentage of overall gains in the long run."
Exchange-traded funds offer broad diversification and automated portfolio rebalancing across many securities. ETFs typically charge only a few basis points for internal portfolio management, lowering long-term cost drag on compounded returns. Lower fees compared with past decades have driven substantial capital inflows into ETFs. Cost efficiency and automatic turnover management enable investors to access diversified risk management at scale. The utilities sector provides exposure to companies supplying electricity and natural gas, and utilities can benefit from increased power demand tied to AI and compute expansion. Vanguard Utilities Index Fund ETF (VPU) is recommended as a core utilities-sector ETF option.
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