4 ETFs: The building blocks of robo-portfolios
This chapter covers
- The basics of exchange-traded funds (ETFs)
- The advantages of ETFs in a robo-advisory strategy
- Analyzing the costs of owning and trading ETFs
- Beyond plain-vanilla indices: socially responsible investing and smart beta
As we mentioned before, there are over 200 robo-advisors in the United States alone. The features, costs, and clear investment choices vary across advisors, but nearly all share one common trait: the use of exchange-traded funds (ETFs) in implementing their investment strategies. This chapter is all about ETFs—what they are, how they work, and why they are so widely used by robo-advisors.