Mastering ETFs | Soojz

  Introduction Before buying an exchange-traded fund, every investor should take time to review the ETF prospectus — yet most people skip it. I get it; it’s long, dense, and full of jargon. But inside that document lies everything you need to know about what you’re truly investing in. When I first started exploring ETFs, I treated the prospectus as a formality — something to click past on a brokerage platform. However, after experiencing unexpected volatility in a “safe” ETF that turned out to be leveraged, I learned the hard way how crucial that document is. This article will help you understand how to decode an ETF’s prospectus like a pro. We’ll cover what to look for, the most common red flags, and how to protect your portfolio by reading between the lines. Whether you’re new to ETFs or an experienced investor, mastering the prospectus is your gateway to smarter, more confident investing. Understanding What an ETF Prospectus Really Is An ETF prospectus is a legal documen...

  Introduction: Understanding the Real Costs of ETFs  When investing in ETFs, most people focus on the expense ratio and overlook other costs. However, understanding your true cost of ownership , which includes both fees and trading spreads, is crucial for maximizing long-term returns. When I first started trading ETFs, I assumed that low expense ratios meant minimal costs. I quickly realized there’s more to consider — trading spreads, bid-ask differences, and hidden charges can quietly erode profits over time. Expense ratios are straightforward: a percentage of assets under management deducted annually to pay fund managers and cover operational expenses. But the story doesn’t end there. Buying or selling ETF shares involves a spread between the bid and ask price, along with potential brokerage fees. Ignoring these can lead to underestimating your total cost and overestimating net returns. In this blog, I’ll break down how to calculate the true cost of ownership for ETFs,...

  Introduction: Understanding ETF Revenue Streams  Exchange-Traded Funds (ETFs) are widely praised for their accessibility, liquidity, and low costs, but have you ever wondered how ETF issuers make money ? At first glance, ETFs seem like a simple investment product: you buy shares, track an index or strategy, and enjoy market exposure. But behind the scenes, fund managers have a sophisticated business model designed to generate profit while delivering value to investors. When I first started investing in ETFs, I assumed that low-cost funds were barely profitable for issuers. I quickly learned that the economics of ETF fund management are multi-layered. Issuers earn revenue through several channels, including management fees, securities lending, and the bid-ask spread during creation and redemption processes. Understanding these streams is crucial for investors, not only to gauge costs but also to make informed decisions about fund selection. In this blog, we’ll explore the ...

  Introduction  When I first started investing in ETFs, I never paid much attention to interest rates . I thought they only mattered for mortgages or savings accounts. But soon, I learned that interest rates have a huge influence on ETF prices — especially for bond and growth-oriented funds. Whether rates are rising or falling, they ripple through nearly every corner of the ETF market, shaping returns, volatility, and investor sentiment. Interest rates move ETF prices because they directly affect borrowing costs, market expectations, and the value investors assign to future earnings or fixed income. When central banks like the Federal Reserve raise rates, borrowing becomes expensive, yields rise, and bond prices (and often equity ETFs) tend to decline. Conversely, when rates fall, liquidity improves and risk assets like stock ETFs often surge. Understanding this connection helps me — and other investors — make informed choices. It’s not about timing the market but about u...

  Introduction When I first began investing with ETFs, I found myself torn between two strategies: stay broad and passive or pick the high-growth niche funds . Fortunately, I discovered a middle path called the core-satellite investing strategy with ETFs . Essentially, the idea is simple: anchor your portfolio with a stable “core” of broad-market ETFs, and then surround it with “satellite” holdings—smaller, targeted ETFs that aim to capture higher returns or diversification. Using this method, you get the best of both worlds. The core gives you broad exposure, low cost, and predictable returns, while the satellites allow you to tilt toward growth areas, thematic plays, or tactical opportunities. In my own portfolio, when I designated roughly 80% to core and 20% to satellites, I noticed two things: I slept better at night because the core held steady, and I still had excitement and opportunity in the satellites. In this blog, we’ll dive into exactly how the core-satellite strate...