About ETFs
ETFs(exchange traded funds)
are funds that can be transacted during the same day at a traditional stock market, in the same way as the company stock holdings. ETFs are investment funds, passively managed, that track an index or reference point, with the purpose of reproducing the index performance.
Some ETFs are conceived to track certain stocks, bonds or merchandise indexes. Most ETFs aim at the index or reference point reproduction in proportion of 1:1, while others have as purpose the index inversed performance reproduction. Also, there are ETFs which track indexes in a version with degree of obligation, long or short.
The advantages of ETFs:
- Simple transaction during the same day and easy to execute;
- High level of liquidity;
- Transparency;
- Simple modality of portfolio diversification and risk distribution;
- Reduced commissions comparing to the traditional mutual funds.
Saxo Bank offers nearly 800 passively managed ETFs that cover a wide range of markets and sectors. Clients can follow an ETF performance with the help of some platforms.