What is an ETF | What County

What is an ETF

With ETFs (Exchange traded funds) you can easily and cheaply invest in stocks and build up long-term assets. An ETF is an exchange-traded index fund that tracks the performance of well-known market indices one-to-one.


An ETF (ENGL.: “Exchange Traded Fund”) is an exchange-traded index fund that tracks the performance of an index, such as the DAX. At its core, ETFs combine the advantages of stocks and funds in one product.

ETF Definition: Exchange Traded Funds – Exchange traded index funds
ETFs allow you to invest inexpensively in entire markets with one security. For example, with a single MSCI World ETF, you can spread your investment to around 1,600 companies from all over the world. In addition to stocks, ETFs also allow you to invest in many other asset classes. Due to this diversity and their specific characteristics, ETFs are perfect building blocks for private investment. No wonder, then, that more and more investors are betting on ETFs when it comes to wealth creation. ETFs simply replicate a market index one–to-one and can – like a share – be traded on the stock exchange at any time.

What is an ETF
What is an ETF

The most important thing in a nutshell
Exchange-traded index funds (ETFs, exchange–traded funds) help you to build up long-term assets with stocks – easily and cheaply.
ETFs track stock lists, so-called indices such as the Dax, S&P 500 or the MSCI World stock index. With an ETF, you achieve exactly as much return as the broad masses of stock investors.
ETFs are just as safe as actively managed funds: money that you have invested in ETFs is special assets and protected in the event of the bankruptcy of the ETF provider.

An ETF is a replica of a stock market index: in the simplest case, a fund company takes your money and that of the other investors and buys all those securities that are included in the index. Most often these are stocks or bonds.

Let’s take the German stock index Dax as an example: this index shows how much the 40 largest listed companies in Germany are worth. An ETF that tracks the Dax would now buy exactly these 40 shares – and then develop in value in the same way as the Dax.

What is an ETFs and how does it work?
Is ETF better than stock?
How is an ETF different from a stock?
What is an example of an ETF?

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