Exchange-traded funds (ETFs) are investment funds that are traded on stock exchanges. Most ETFs are passively managed, but there are also actively managed ETFs.
ETFs are similar to index funds in that they typically aim to accurately reproduce developments in a stock index. However, there are also ETFs that invest in markets other than stock indexes.
Example: An ETF based on the SMI index will invest in all of the stocks that are tracked by that index, in the same or similar proportions.
As an investor, ETFs make it easy to diversify your investments across an entire market. You buy shares in the fund, which in turn invests in a whole portfolio of assets.
Another benefit of ETFs is that most of them have low fees and charges. They are usually much cheaper to use than conventional mutual funds because most ETFs are passively managed. However, there are also actively managed ETFs.
Find out where you can invest in ETFs at the lowest possible cost here.
More information:
Trading comparison tool
Private banking comparison tool
Checklist for choosing the right ETF
