Part 3/15:
Steve McClure provides a clear explanation: an ETF is a financial instrument that makes it easy for investors to gain exposure to various assets, such as stocks, gold, silver, or Bitcoin. Instead of physically purchasing and storing these assets, investors buy shares of the ETF, which represents a basket of underlying assets. This structure offers benefits like liquidity, transparency, and low costs.
He emphasizes that for physical assets like gold, ETF providers are obliged to hold actual reserves at third-party custodians. This ensures that the assets backing the ETF are real and verifiable, contrasting sharply with fraudulent schemes like Bernie Madoff's Ponzi scheme, where assets were falsified.