Securities

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

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