Börsenlexikon: Exchange Traded Fund

The term Exchange Traded Funds - ETFs stands mutatis mutandis for "funds traded on the stock exchange". A distinction is made between two types of exchange traded funds: passively managed funds, also often called index funds, which currently dominate the market segment, and actively managed funds. Compared to conventional fund products, ETFs combine the advantages of a diversified fund investment with the trading advantages of a share for the investor.

Exchange traded funds do not have a maturity limit, like most index certificates. This means that the investor is not forced to realize gains or losses at a potentially inopportune time. In addition, dividends on index certificates based on price indices often remain with the issuer and do not accrue to the investor. Thus, the investor has no opportunity to participate in the profit distributions. In addition, an ETF is legally a fund, i.e. a special asset, and unlike index certificates it does not involve any issuer risk. This is why ETFs are also interesting for pension funds. Due to the variety of products, investors should in any case carefully examine the advantages of the products and decide individually.

Exchange traded funds do not have a maturity limit, as do most index certificates. This means that the investor is not forced to realise gains or losses at a potentially unfavourable time. In addition, dividends on index certificates based on price indices often remain with the issuer and do not accrue to the investor. Thus, the investor has no opportunity to participate in the profit distributions. In addition, an ETF is legally a fund, i.e. special assets, which means that, unlike index certificates, it does not involve any issuer risk and is therefore also of interest to pension funds. Due to the variety of products, investors should in any case carefully examine the advantages of the products and decide individually.