Exchange Traded Funds (ETFs)

ETFs, or listed funds, are hybrid investment instruments that fall between funds and stocks, such that they combine the diversification offered by a fund portfolio with the flexibility that comes with being able to enter and exit that fund with a simple stock market transaction. ETFs are therefore investment funds whose shares are traded and settled just like stocks. Another fundamental characteristic of ETFs is that they are indexed funds, i.e., their investment policy consists of replicating the behaviour of a certain benchmark index.