Lower volatility and reduced risk
The price of a stock can change dramatically throughout the day due to company news and other events. ETFs generally have lower price volatility than individual stocks due to their inherent diversity in more than one security. The overall price movement of an ETF is dependent on the movement of all the holdings in the fund. Should one or more holdings of the ETF experience price volatility, generally the other holdings in the fund (with less volatility) will moderate the ETF's overall price movement. The lower volatility inherent in ETFs reduces.
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