Executive Summary
Exchange Traded Funds (ETFs) have become one of the most widely used investment vehicles for both individual and institutional investors. Since their introduction in the 1990s, ETFs have grown significantly due to their ability to deliver diversified market exposure in a low-cost, tax-efficient and transparent structure.
ETFs offer investors access to a broad range of asset classes, strategies, sectors and geographies, allowing them to efficiently construct and customize portfolios aligned with specific objectives. The structure of ETFs supports diversification, intraday liquidity and pricing efficiency through the roles of authorized participants and market makers, helping ensure ETF prices closely track their underlying net asset value.
In addition, ETFs are generally more tax-efficient than traditional mutual funds due to their ability to use in-kind creation and redemption mechanisms, which can reduce capital gains distributions. With the increasing availability of both passive and actively managed options, ETFs continue to evolve while maintaining the core benefits that have driven their widespread adoption.
Key Takeaways
- Diversification made simple: ETFs provide instant diversification across stocks, bonds, sectors, styles, countries and asset classes, helping manage portfolio risk more efficiently than single-security investments.
- Low cost advantage: ETFs typically have significantly lower expense ratios than mutual funds, particularly passive ETFs, making them an attractive building block for long-term investors.
- Ease of access and flexibility: ETFs can be bought and sold throughout the trading day with no minimum investment, offering liquidity and flexibility that mutual funds do not provide.
Please consider the investment objectives, risks, charges and expenses of the fund carefully before investing. The prospectus and the summary prospectus contain this and other information about the Fund. To obtain a prospectus or a summary prospectus, contact your financial professional or download and/or request one on the resources section or call Touchstone at 800-638-8194. Please read the prospectus and/or summary prospectus carefully before investing.
Touchstone ETFs are distributed by Foreside Fund Services LLC
A registered broker-dealer and member FINRA.
