There’s a great investing option out there, and chances are, it’s not in your portfolio.

That option is Exchange-Traded Funds or ETFs, and they’re worth considering. Brian Mumbert joins us today to discuss the advantages of ETFs.

Brian Mumbert is Vice President and Regional Sales Executive at Timothy Plan, an underwriter of Faith & Finance.

What is an ETF?

An Exchange-Traded Fund (ETF) is an investment option similar to a mutual fund but with distinct features. ETFs typically follow an index, such as the S&P 500 or NASDAQ, and are not actively managed. This means that an ETF holds a broad mix of investments, providing diversification that tracks the chosen index. One key advantage is that ETFs, like stocks, can be traded throughout the day, allowing investors to buy or sell at the current market price.

How Do ETFs Differ from Mutual Funds?

Unlike mutual funds, where the exact purchase price isn’t known until the end of the trading day, ETFs offer real-time pricing. This flexibility allows investors to trade whenever they choose during market hours. Additionally, mutual funds may pass on capital gains taxes to investors due to asset sales by fund managers, but ETFs generally avoid this by trading “baskets” of stocks, potentially reducing tax liability.

Transparency and Tax Advantages

ETFs offer high transparency, with daily disclosures of their holdings. This transparency is a significant benefit for investors who prioritize clarity in where their money goes. Tax advantages are another key feature; ETFs often avoid capital gains taxes, which can be passed on to mutual fund holders, especially during high turnover periods.

Faith-Based Screening for ETFs

Timothy Plan applies the same rigorous faith-based screening to its ETFs as it does to its mutual funds. These screenings filter out companies that conflict with Christian values. While ETFs are passively managed, which can mean a slight delay in removing non-compliant holdings, Timothy Plan flags them for removal to ensure alignment with their mission. This gives investors peace of mind, knowing their ETF investments are held to the same ethical standards as other Timothy Plan products.

Lower Cost, Greater Accessibility

ETFs offer a lower expense ratio than some mutual funds for investors looking for a cost-effective entry into faith-based investing. This affordability can make ETFs an attractive option for individuals who may be deterred by higher fees and a practical choice for adding diversified exposure to one’s portfolio.

Visit TimothyPlan.com for more details on Timothy Plan’s offerings, including faith-based ETFs and mutual funds. With over 30 years of experience, Timothy Plan provides a reliable option for investors who want to align their finances with their faith.

On Today’s Program, Rob Answers Listener Questions:

• I'm 60 years old and want to retire early at 62. Before I do that, I'd like to pay off my house. Is that advisable?
• My son has started a new sales outside sales position and will receive a base salary. How can I advise him on how to begin a budget and maintain it when you have commission as your primary source of income?
• I was wanting to find out about a book you mentioned. I think it was for widows for budgeting who may not know how to do that, per se. What is the title of that book?
• We're revising our wills and deciding how much to give to our heirs and charity. What counsel do you have on how to make that decision?

Resources Mentioned:

• Timothy Plan
• Wise Women Managing Money: Expert Advice on Debt, Wealth, Budgeting, and More by Miriam Neff and Valerie Neff Hogan, JD.
• Splitting Heirs: Giving Your Money and Things to Your Children Without Ruining Their Lives by Ron Blue
• Look At The Sparrows: A 21-Day Devotional on Financial Fear and Anxiety
• Rich Toward God: A Study on the Parable of the Rich Fool
• Find a Certified Kingdom Advisor (CKA) or Certified Christian Financial Counselor (CertCFC)
• FaithFi App

Remember, you can call in to ask your questions every workday at (800) 525-7000. Faith & Finance is also available on Moody Radio Network and American Family Radio. You can also visit FaithFi.com to connect with our online community and partner with us as we help more people live as faithful stewards of God’s resources.

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