An ETF—Exchange Traded Fund—is an exchange-traded fund that typically tracks a specific index, sector, thematic basket, or asset class.
ETFs are traded on stock exchanges like individual shares, allowing investors to gain broad diversification through a single instrument. Compared to actively managed funds, ETFs generally have lower costs because they do not require active portfolio management.
They are available in a wide range of variations, including equity ETFs, bond ETFs, commodity ETFs, and thematic ETFs.
In wealth management, ETFs are frequently used as cost-efficient building blocks for long-term wealth accumulation, for implementing asset allocation strategies, or as tactical additions to a portfolio. Their high liquidity and transparency make them attractive for both beginner and institutional investors.
