Why invest in exchange-traded funds?

If you are looking for an easy way to invest your savings, diversify your portfolio and plan for the future, ETFs – Exchange-Traded Funds – offer a simple, affordable way to enter financial markets.

ETFs have made investing far more widely accessible since being launched in the 1990s. Today, they provide millions of investors like you a simple way to place even small sums of money in financial markets.

An ETF is an investment fund, regulated by European law, which pools investors’ money to invest in stocks, bonds or other asset classes.

Index or ‘passive’ ETFs track indices like the Eurostoxx 50 or S&P 500, giving you access to up to 500 companies in one investment. They aim to replicate their index’s performance, including dividends, by investing in hundreds, sometimes thousands, of individual securities. So your opportunities are diverse, your risk is spread and the impact of a fall in any individual asset price is reduced.

Unlike most mutual funds, ETFs trade on a regulated stock exchange. As ETFs are liquid, you can always buy and sell at the quoted price.

ETFs are hugely successful because:

• They are accessible with small investment amounts and, as they allow for regular investment, they can be a good savings tool
• They are simple, transparent and diversified, providing you exposure to a broad choice of markets and asset classes
• They are passively managed and offer low operating costs 
• They trade on exchanges so you can buy or sell quickly and easily throughout the trading day.