HSBC Saudi 20 ETF (Shariah-compliant)
What is an Exchange Traded Fund?
An exchange-traded fund (ETF) is a mutual fund that is listed and traded on a stock exchange. Most ETFs are created with the aim of matching as closely as possible the performance of market indices and therefore allow exposure to the broad market through a single fund. Since they are listed on a stock exchange, investors buy and sell ETFs using a stock broker or market maker. You do not need to deal with the Fund Manager in the way that you would typically need to when investing in a traditional mutual fund.
Why consider buying an ETF?
ETFs have become increasingly popular. This is because ETFs are considered to have attractive features including relatively low fees, transparency of underlying investments, convenience of trading at any time of day (when the stock exchange is open) and all the other benefits of mutual funds such as independent custody of assets.
There are many reasons why investors around the world choose to access the world's financial markets by investing in ETFs. Here are a few common reasons why they do, one or more of which may be of interest to you.
- Relatively low cost
- Clear objectives
- Up to the minute pricing
- Liquidity
- Transparency