What are you really buying when you invest in an ETF, mutual fund, or index fund?

A little research can help you understand what stocks are included in a fund and whether they align with your values.

Take 3 of the most-traded ETFs, for example:

1. SPDR S&P 500 ETF (SPY)

SPY tracks the S&P 500 Index and holds 505 well-diversified stocks. When you buy SPY, you get: 

2 tobacco companies 1
14 weapons companies 2
163 companies that have received customer or product fines in the last 3 years 3
236 companies that have received worker-related fines in the last 3 years 4
99 companies that have received environmental fines in the last 3 years 5
26 oil companies
Is NOT a tobacco or weapons company, or has NOT received fine
IS a tobacco or weapons company, or HAS received fine

2. Invesco QQQ Trust ETF (QQQ)

The Invesco QQQ fund holds 103 of the largest domestic and international companies, excluding financial stocks, by tracking the Nasdaq-100 Index.

When you buy QQQ you get a tech-heavy mix with no tobacco, weapons, or oil companies, though over 30% of its holdings have received worker-related fines over the past 3 years:

Is NOT a tobacco or weapons company, or has NOT received fine
IS a tobacco or weapons company, or HAS received fine

3. SPDR Financial Select Sector SPDR Fund (XLF)

XLF targets financial stocks and follows the Financial Select Sector Index.

It has no tobacco, weapons, or oil companies, but over 40% of its companies have received customer-related fines over the last 3 years:

Is NOT a tobacco or weapons company, or has NOT received fine
IS a tobacco or weapons company, or HAS received fine

Like other products, funds should tell you what you're buying before you buy them.

Ethos helps you understand what's behind ETFs, index funds and mutual funds. When you link an account through Ethos we show you what's included in your funds.

We also aggregate all of the companies you hold through all of your funds, so you see a single picture of your total investment in individual companies. 

Knowing what you're investing in shouldn't be hard, and we all want to make decisions based on what we care about.