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ETFs & Index Funds
Passive, low-cost index tracking
ETFs & Index Funds
An Exchange-Traded Fund (ETF) is an investment fund that holds a basket of assets such as stocks, bonds, or commodities and is traded on a stock exchange like an ordinary share. Investors can buy and sell ETF shares throughout the trading day. An index fund is a type of mutual fund or ETF designed to track the performance of a specific market index, such as a stock market index. Instead of trying to outperform the market, it aims to replicate the returns of the chosen index.
Features
Features of ETFs
- Traded on stock exchanges.
- Provides diversification through a portfolio of assets.
- Generally has lower fees than actively managed funds.
- Can be bought and sold throughout the trading day.
- Offers exposure to specific markets, sectors, or indices.
Features of Index Funds
- Passively managed.
- Tracks a specific market index.
- Typically has low management costs.
- Provides broad market diversification.
- Performance closely matches the underlying index.
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