What is an ETF?

‘Exchange Traded Funds’ are an easy way to invest

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ETFs are investment funds that aim to track the performance of a specific index, such as the Swiss Market Index (SMI).

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An index represents the total return of a particular group of securities – often shares or bonds.

How do they do that?

A group of securities are effectively collected in a basket with the amount of each security in the fund weighted by size to precisely replicate a particular index. An ETF is bought and sold on a stock exchange, like a share.

What are ETFs

Advantages

Flexibility

ETFs provide exposures to suit both your core portfolio and tactical investing

Cost-effective

ETFs often have lower management fees than active funds and the costs are simpler to calculate

Diversification

ETFs offer a single source of instant exposure to returns from diverse securities

Transparency

ETFs show every security currently in the fund so you know exactly what you own

Liquidity

ETFs are listed on exchanges and can be traded at any time during market hours

Access

ETFs allow instant access to international markets

The variety of available ETFs mean that you could

 

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invest in a single
ETF as a core
exposure to
complement your
portfolio
fine tune your
preferred
exposure in a
particular region,
commodity or
asset class
build an entire
investment
portfolio at a
lower cost using
ETFs
create a solid,
relatively
inexpensive core
to your portfolio
releasing capital
for more active
investing