What are Exchange Traded Funds (ETFs)?
An Exchange Traded Fund is often referred to as an ETF. They’re built like managed funds, but they can be bought and sold on the share market like ordinary shares.
You can think of an ETF as a basket of investments. Each ETF purchases a range of assets (like shares, bonds, commodities and currencies), and their aim is to match the performance of a particular market index or benchmark.
For example, an ETF might aim to track the ASX200 Australian share index by investing in the top 200 Australian companies trading on the ASX.
Another ETF might aim to track a particular commodity (like gold or silver), or an industry sector (like healthcare or mining). Some ETFs can even give you exposure to international markets.
