ETFs are a smart choice for beginning and expert investors alike. Here you’ll find everything you need to know, to see if ETFs are right for you.
An ETF is an investment fund that is traded on a stock exchange.
The aim of an ETF is to track the performance of a specified index (like the FTSE 100) and to provide you with the same return as that index, less fees. As a fund, your ETF investment gives you access to a portfolio of companies (shares), bonds or other asset types (such as commodities or property).
Like a share, an ETF is bought and sold on a stock exchange. Consequently, ETFs offer you the best of both worlds – the diversification of an investment fund, with the easy tradability of a share.
Buying a single ETF gives you exposure to a specific market. Alternatively, you can buy a range of ETFs over several markets in order to implement a more sophisticated investment strategy.
In short, ETFs represent building blocks which can help you create the investment portfolio you want.