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Fundamentals
ETFs and Index Funds
An Exchange-Traded Fund (ETF) is a basket of stocks that you can buy as a single investment. When you buy one share of an S&P 500 ETF, you effectively own a tiny slice of all 500 companies in the index.
Why ETFs Are Popular
Warren Buffett has repeatedly recommended that most investors simply buy a low-cost S&P 500 index fund. The reason is simple: most actively managed funds underperform the index after fees. ETFs offer instant diversification, low costs (some charge as little as 0.03% per year), and they trade like ordinary shares.
UK-Friendly ETFs
Ticker
Name
ISA?
VUSA.L
Vanguard S&P 500 UCITS
Yes
ISF.L
iShares UK Equity Index
Yes
ETFs can complement a value investing strategy. Use a core ETF holding for broad market exposure, then add individual net-net or value picks as satellite positions.