- What distinguishes an exchange-traded fund from a traditional fund?
ETFs are traded on the stock exchange like shares, at market price, that will change during the trading day in line with the specific index that the fund is tracking.
- How can I use exchange-traded funds?
With exchange-traded funds, it is possible to take advantage of the markets daily movements as they are priced and traded in real time. This also makes adjusting your holdings much easier.
By using exchange-traded funds in your portfolio, risk diversification will be more manageable. With only one security you can track the development of your desired market. The management fees are among the lowest in the market which makes the funds an interesting long-term investment.
- How do I trade in an ETF?
An ETF is traded in the same way as a share. You can buy or sell fund units several times during a trading day as they are priced and traded in real time.
- How is pricing done?
Appointed market makers are continuously quoting bid and offer prices based on the fund´s value in real time.
- How is the liquidity of exchange-traded funds?
Appointed market makers and authorised participants provide liquidity in the ETF´s by continuously offering bid and ask prices.
- What is the cost associated with exchange-traded funds?
Costs consist of a commission and a management fee. When buying and selling an ETF you will pay a commission fee to your broker as you would for any other stock. The management fee is between 0.3 percent and 0.80 percent of the fund value per year, depending on which fund you choose. The management fee is deducted each day.
- What is the holding of the funds?
The underlying of Xact OMXS30, Xact OMXSB, XACT OBX and Xact Nordic 30 is baskets of shares. Xacts leveraged ETFs holds exchange traded index futures. Xact´s sector ETFs, Xact Nordic 120, fixed income ETFs, Xact Commodity and Xact China replicate its benchmark index by fully collateralised OTC-derivatives issued by Handelsbanken.
- Does the fund pay out dividends?
All of Xact's ETFs reinvest the dividends except for Xact OMXSB Utdelande, which pays a cash dividend annually to the unit holders.