What to look for in an ETF

If you are absolutely dead set on investing in an ETF and nothing else will be satisfactory to you, then go ahead and invest in an ETF following the advice of whichever broker you trust to give you good advice regarding this matter as to which of the many different ETFs you should invest in. You will, of course, have to pay for such advice, directly as cash in the form of transaction fees for purchasing shares of the ETF (and later for selling the shares), and indirectly in the form of the annual fee that brokerages charge each client. (Many brokerages do waive transaction fees for buying and selling ETFs that they themselves sponsor, but not for ETFs sponsored by others) In contrast, advice given on money.SE is free, but it can be worth exactly what you pay for it, and in many cases can even be harmful to your financial health. In my opinion, for a beginning investor with small amounts of money to start with, the advice to invest in ETFs falls in this last category.

My personal advice to beginning investors whose ears have been filled by back-fence talk and cocktail-party chatter and calls from financial advisors about brokerages and the advantages of investing in ETFs and how investing in ETFs is the best thing to do is contrarian:

DO NOTHIING OF THE SORT.

It is far far better for the beginning investor starting out with small amounts of money to invest in a low-cost non-exchange-traded mutual fund such as one that tracks the S&P 500 Index or the Total Market Index or a MidCap Index or a Small-Cap Index etc instead of the corresponding ETF. Shares of such mutual funds can be bought and sold directly on the mutual fund's website without going through a brokerage. Also, one can buy fractional shares of mutual funds (down to a thousandth of a share) whereas only integer numbers of ETF shares can be bought and sold. Thus, all one's money can be fully invested in a mutual fund instead of some being held for a future purchase because it is not enough to buy one full share of an ETF. Similarly, when the mutual fund makes a distribution, it can be fully reinvested in additional shares of the fund (one doesn't have to reinvest, but it is an available choice), whereas a distribution from an ETF is a cash payment that might not be fully reinvestable in the ETF because the amount cannot buy an integer number of shares. True, the minimum investment to begin investing in an ETF is one share and so the minimum investment in an ETF is usually much smaller than the minimum investment in a mutual fund (typically, in thousands of dollars); and ETF shares can be bought and sold at any time the markets are open, but these are minor issues compared to extra brokerage fees for buying and selling "odd lots" of shares: brokerages like to trade in "round lots" of 100 shares (or multiples of 100 shares) and charge more if you want to buy or sell 37 shares, say. Also, for a beginner, making an investment and holding it for a long time is far better than chasing performance and buying and selling ETF shares at 11:30 a.m. just because one can, instead of waiting for the trade to be executed that evening when the markets have closed and the mutual fund has figured out its price.