Investing term

What is Broad ETF?

An ETF that tracks a wide market index — total US stock market, total international, total bond market.

A broad ETF tracks a wide market index — the total US stock market, all international developed markets, or the whole bond market — rather than a narrow slice. One purchase hands you thousands of holdings, maximum diversification, and rock-bottom fees, which is why broad ETFs are the workhorse of simple, low-cost portfolios.

For example

A single total-market ETF holds 3,000+ US companies — buying it is closer to "owning the economy" than betting on any one sector.

Broad ETF is taught hands-on in Stage 16 — Portfolio Construction.

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Related terms

Concentration riskThe risk that one position, sector, or country represents enough of the portfolio that a single bad outcome dominates returns.Position sizeThe fraction of the total portfolio invested in a single holding.RebalanceSelling some of what's grown most and buying more of what's grown least to return the portfolio to its target weights.RegionA geographic grouping of equity exposure — US, developed-ex-US, emerging markets, etc.
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