Never skip these 5 essential checks before investing into an ETF 🕵️ Not financial advice. Capital at risk when investing. Do your own research. #investing #PersonalFinance #investingforbeginners #LearnOnTikTok #moneytok

I would never put money into an ETF without checking these five things first. And if you're new here, I'm Emmy. I've spent 11 years in investment banking and built a 300k portfolio in my 20s. Number one is annualized performance. Basically, how well the front has done on average each year. Of course, everyone says past performance does not predict the future, but it does tell you how the front has behaved in different market conditions. That's a very important benchmark when you want to compare to other ETFs. Number two is dividend frequency. ETFs can be distributing when the dividends are paid out in cash or accumulating when the dividends are automatically reinvested into the fund. I personally almost always go for accumulating because that way I can take full advantage of compounding without me having to lift the finger. Next off, we have volatility. This measures how much the value of the fund goes up and down over time. The number to look for is called beta. Beta of one means it moves in line with the market, below one means it's calmer, and above one it's bigger swings in both directions. So for example, SMH, the semiconductor ETF has a beta of 1.5. So if the SMB 500 drops 10%, SMH could drop 15%. In general, lower volatility ETFs are considered less risky, but keep in mind that less risk often comes with lower potential returns. Number four is the fund's top allocations. Knowing which sectors and regions dominate the fund helps you understand if it's diversified enough, which is directly linked to how much risk you're taking on. And finally, number five is the expense ratio. This is the money you pay every year for holding the fund. It's usually taken automatically so you don't see a separate charge on your statement. It's charged by the fund manager to cover things like running the fund, tracking the index and compliance. For ETFs, anything below 0.20% is considered cheap. Many broad market ETFs sit between 0.05 and 0.3%. It might sound small, but on the long term, even a difference between 0.2 and 0.3% can cost you thousands of pounds, because it compounds every year. So those are the five key things I checked before investing into any ETF. If you found this useful, drop a comment with the ETF you're currently looking at, and follow for more.