Hereβs a super simple cheat sheet to help you understand common ETF words without the overwhelm. There's also a graphic you can save and download.
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π ETF (Exchange Traded Fund) β A basket of lots of companies you buy in one trade.
π Index β A list of companies the ETF follows instead of guessing winners.
π Diversification β Spreading money across many companies to lower risk.
π Dividend β Cash payments from companies you own through the ETF.
π Distribution β The income your ETF pays you (dividends + other earnings).
π Volatility β How much prices move up and down β the marketβs mood swings.
π Market Cap β The size of a company based on total value.
π Management Fee β A small yearly cost to have the ETF managed.
π International ETF β Invests in companies outside Australia.
π Australian ETF β Invests mostly in Aussie companies.
π Rebalancing β When the ETF adjusts itself to stay on track.
π Ticker Code β The short code used to find an ETF on the market.
π NAV β The real value of everything inside the ETF.
π Passive Investing β Following the market instead of trying to outsmart it.
π Growth ETF β Focused more on long-term growth.
π Income ETF β Focused more on regular payouts.
π Asset Allocation β How you split money across investments.
π Risk Tolerance β How comfortable you are with ups and downs.
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