Investing2 min read
ETFGerman: ETF
An ETF (exchange-traded fund) is an investment fund whose shares trade on an exchange. Many ETFs track an index.
In plain language
One fund share gives you exposure to a basket of securities. Its documents describe its holdings, diversification and costs. Some ETFs are actively managed rather than tracking an index.
Let’s make it concrete
An equity ETF holds shares in many companies. A decline in one company affects only part of the fund. A broad market downturn can still hurt the entire ETF.
Simplified example for illustration.Worth understanding
An ETF is not automatically cheap, diversified or safe. Sector, leveraged and inverse ETFs can involve particularly high risks.
Read more from official sources
For further learning and reference:
Financial education for orientation. No individual investment, tax or legal advice.
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