ETF
An Exchange Traded Fund (ETF) is a fund that can be bought and sold on a stock exchange throughout the trading day, just like a share.
1 min read Learning to Invest
What it means
An Exchange Traded Fund (ETF) is a fund that can be bought and sold on a stock exchange throughout the trading day, just like a share. Many ETFs track an index, although some invest in specific sectors, regions or assets.
Example
You buy one global ETF through your investment account in the same way you would buy shares in a company.
Why it matters
ETFs combine the diversification of a fund with the flexibility of trading like a share.
Not every ETF is an index fund, and not every index fund is an ETF.
Are ETFs riskier than funds?
No. The risk depends on what the ETF invests in, not the fact that it's an ETF.