So what exactly is the difference between the 2 tags now in discovery
- Stock ETFs
- Bond ETFs
So what exactly is the difference between the 2 tags now in discovery
A stock ETF contains a selected basket of stocks. ETFs might target a particular geography (eg “US”) or a particular company size (eg “small cap”) or a particular sector or theme (eg “pharma” or “ESG”).
A bond ETF contains a selected basket of bonds. These are typically debt issued by governments or companies (so: gov/company borrows money, pays interest on it over time). Generally thought of as being less volatile and lower risk/lower reward than stocks.
Here’s some more info about bonds, in case you’re interested -
We’ve written lots more blog posts like that with explanations of different types of investments in our blog, you can find them here: Introductory wiki 🐣
Baffled but I have a bond etf in my portfolio!
Baffled about bonds or how bonds can be part of an ETF?
Baffled reading that blog about bonds
Yeah, it’s a bit
Basically it’s just trading IOUs. Price fluctuates based on how long is left on the bond and how risky it is. Think that’s all I need to know for now since I’m only going to get Bond ETFs
Well a stock ETF is a collection of stocks
A bond ETF is a collection of debt (I assume less risky as if one defaults the others should be okay)