The intraday trading also allows ETF shareholders to benefit from greater liquidity, as compared to once-a-day mutual funds. This liquidity results in greater volume, reducing costs and ensuring more accurate pricing.
The success of ETFs has done away with a drawback often attributed to them in the early days. Then, ETFs were believed to be limited to plain-vanilla asset classes, such as large American stocks, while mutual funds enjoyed a reputation for going where no investor, at least no mainstream American investor, had gone before, including small emerging markets.
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The thinking was that successful investing in the developing world depended on active portfolio managers with intimate knowledge of local activity, but by now, whatever edge there may have been has been reduced substantially. Emerging markets are broader and deeper, so indexes can now provide a better reflection of local economies, making passively managed ETFs a viable strategy.
Today there is a growing number of ETFs available for a wide range of interests, from regional and single-country ETFs in emerging and mature markets to ETFs in foreign niches. There are niche ETFs for specific commodities, and soon even for bitcoin. However, it's important to understand that investing in an ETF still exposes you to the risk of the ETF's holdings—and those holdings can still be poor investments.