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Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

July/August 2023

Understanding ETF Considerations

Understanding ETF Considerations

Investors who are looking for a low-cost investment that offers diversification and tax efficiency may want to consider exchange-traded funds (ETFs)*. ETFs consist of a diversified basket of securities that typically track an index, such as the S&P 500. Purchasing an ETF can give you exposure to an entire industry or sector of the economy. There are many considerations to understand before investing in this or any particular investment.

Sounds Like a Mutual Fund
Both ETFs and mutual funds are managed by SEC-registered investment companies that allow investors to pool their money to buy a professionally managed fund consisting of stocks, bonds, or other assets. Both require a low minimum investment. Investors make money through dividend payments, capital gains distributions and increases in the value or market price of the fund, less sales charges, fees, and expenses.


A Major Difference
The biggest difference between ETFs and mutual funds is in the way they’re bought and sold. ETFs trade on a stock exchange at market prices throughout the trading day. As with individual stocks, you must have an account with a brokerage firm to buy and sell ETF shares. Investors are not charged a fee to purchase or sell ETF shares; however, there may be other transaction costs, such as brokerage commissions.


Mutual fund shares are purchased from and sold back to the fund at their net asset value (NAV), which is calculated at the end of the trading day. You won’t know the exact share price until after the markets close. Fees and expenses for buying, selling, or exchanging shares are charged directly to investors.


An ETF Drawback
Since they’re traded like stocks, ETFs typically can’t be held in an automatic investment account, such as a 401(k). Your financial professional can help you determine if investing in an ETF makes sense for you.


*Investors should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. Contact the issuing firm to obtain a prospectus which should be read carefully before investing or sending money. Because fund values fluctuate, redeemed shares may be worth more or less than their original value. Past performance won’t guarantee future results. An investment in ETFs may result in the loss of principal.


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Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
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