What is an exchange-traded fund?

• Index fund. The Fund tracks a certain index.
• Noted on a stock exchange. The fund units are traded in real time at market price on the Stockholm stock exchange.
• Diversification. A fund unit corresponds to a basket of shares, or a financial instrument. The value of the fund unit is reflected by the value of the underlying basket.
• Easy. With one security you get exposure to a given market.
• Low cost. The fund has a low management fee.

On the European market, exchange-traded funds (also known as ETF, or Exchange Traded Fund) have been marketed since 2000. ETFs were developed by U.S. fund managers in the early 1990s and has since revolutionized the fund market. ETFs are used by both professional and private investors and are today the financial instruments that have the highest level of growth. XACT is the leading provider of exchange-traded funds in the Nordic region.

What distinguishes an exchange-traded fund from a conventional fund?

ETFs are traded 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?

Take advantage of market fluctuations: ETFs are accessible and liquid. With the exchange-traded funds, it is possible to take advantage of the markets daily movements as they are traded in real time. This also makes adjusting your holding much easier.

Simplify your investments: By using exchange-traded funds in the portfolio risk diversification will be more manageable. With only one security you can track the development of your desired index. Use exchange traded funds as a base in the portfolio and complement with a couple of select stocks. The management fees are among the lowest in the market which makes the funds an interesting investment also in the long term.

How do you trade in an ETF?

The funds are traded in the same way as a share. More or less any broker that can buy Swedish Equities can buy XACT ETFs. You can buy or sell units several times during a trading day as they are traded in real time.

How is pricing done?

The pricing is done by market makers based on a valuation of the fund in real time.

How is the liquidity of exchange-traded funds?

It is very good as it is ensured by market makers who keep putting up the bid and ask prices in all funds.

What is the cost associated with exchange-traded funds?

Costs consist of brokerage fee and a management fee. When buying and selling an ETF you will pay a brokerage fee as you would for any other Swedish stock. The management fee is between 0.3 and 0.65 percent of the fund value per year, depending on which fund you choose. The management fee is deducted each business day.

Where can I find the funds' official NAV prices?

The Net Asset Value (NAV) is the funds' official closing price. The funds' prices are set every morning, based on the underlying assets value at the stock exchange closing and published before trading starts on www.xact.se under "Fund holdings." The prices that have been published in newspapers have a time lag. Example: The price at the exchange close on Monday are published in the newspapers on Wednesday.

How many units is the smallest number that I can buy?

One unit for all the funds that are noted in Sweden or Finland.

What is the holding of the funds?

The underlying for the XACT funds are baskets of shares, so called full replication. Exceptions are the funds XACT Bull and Bear, which holds XACT OMX futures. The funds' current position / holding is published every business day in detail under Fund holdings.

Does the fund pay out dividends?

The unit holders receive a cash dividend shortly after the fund has received it's dividends. The Fund's Board decides on the size of the dividends.