What are exchange traded funds?

An exchange traded fund is a fund that you trade on the stock exchange in the same way you trade shares.

An investment in an ETF means that you in a single trade with a single security has gained exposure to a basket of shares and thereby simply and easily can track the daily movements on the stock exchange. ETF are suitable if you are an active investor and want the possibility to trade on the ups and downs of the market depending on your market view, just as quickly and easily as you trade in shares.

Another characteristic of an ETF is the low annual management fees. If you save long term - and want to maximise your returns over time - exchange traded funds will suit you.

ETF are index funds and follow well know market indices. They are therefore suitable as the core of your portfolio, with single share holdings as a supplement.

An ETF has the diversification of a fund with the tradability of a share.