How does an ETF work?

Published: 9-Apr-2024

Share this article:

Exchange-traded funds (ETFs) are a popular investment option that represents investing into a basket of different assets such as stocks or bonds through a single vehicle.

The investments contained in an ETF are usually determined by shared characteristics and a set of rules. For example, one type ETF might include all the banks listed on ASX while another could include the top 25 global healthcare companies. This diversification helps spread out your risk because if one asset in the ETF performs poorly, others may perform well and balance out your overall return.

ETFs are traded on stock exchanges, just like individual stocks, which makes buying and selling them easy, convenient and allows investors to adjust their portfolios quickly according to their investment goals or market conditions.

Another great thing about ETFs is that they typically have lower fees compared to other fund based investment options making them an attractive choice for both new and seasoned investors looking to grow their wealth over time. Exchange traded funds (ETFs)

Tailored financial planning and investment solutions for every stage of your life

Book a Meeting