Exchange-traded fund

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    Exchange traded fundWhat is exchange-traded fund?

    An exchange-traded fund (ETF) is a type of investment fund that can be traded on a stock exchange. Many are index funds, but there are also other actively managed ETFs.

    The price of an ETF will behave like share prices, in the sense that it will rise and fall according to buying and selling activity, or external factors that influence the price. The price at the time of purchase or sale reflects the net asset value of the fund’s components.

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    Trading ETFs

    As an investment, ETFs offer the advantage of owning a diverse portfolio within a single product. As a trader, you can trade them like you would trade stock market shares.

    You can purchase ETFs in small quantities – some funds will allow you to buy just one share. This makes them ideal for investors, who are new to trading. Brokers’ commission or fees are similar to those of other securities.

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