An exchange traded fund (ETF) is an investment fund made up of shares or bonds from several hundred (or even thousands) of companies (or bonds from several countries).
There are different categories of ETFs, namely stock market ETFs (of countries or indexed markets), commodity ETFs, institutional ETFs (which meet the needs of companies and hedge funds) and hybrid ETFs.
An ETF is an investment fund that replicates, as closely as possible, the performance of a market index.
ETFs are index funds: their objective is not to outperform the benchmark index, but rather simply to track its evolution.
In the same way that you invest in the shares of a single company, you invest in all the companies in the index, via an ETF
This means that you can, for example, buy an ETF that tracks the Eurostoxx50 index (an index of fifty of the largest European companies) or the S&P500 index (which includes five hundred American companies), and you will thus have instant exposure to all these companies.
Still little known to the general public, ETFs (Exchange-Traded Funds), also known as trackers, hide behind a complicated name a simple and effective way to invest in the stock market.
Many experts say that ETFs are the best way to invest in the stock market.