What is an ETF?

Capital at risk. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed.

Exchange Traded Funds

What are ETFs Icon

ETFs are investment funds that aim to track the performance of a specific index, such as the FTSE 100.

What are ETFs Icon

An index represents the total return of a particular group of securities – often shares or bonds.

How do they do that?

A group of securities are effectively collected in a basket with the amount of each security in the fund weighted by size to precisely replicate a particular index.

What are ETFs

Advantages

Flexibility

Investors can use ETFs to build the core of their portfolio or express tactical views

Low cost

ETFs may have lower costs than other types of investment funds

Diversification

ETFs offer a single source of exposure to returns from diverse securities

Transparency

ETFs show every security currently in the fund so you know exactly what you own

Liquidity

ETFs are listed on exchanges and can be traded at any time during market hours

Access

ETFs can provide access to a wide range of international markets

Risks

There are different types of ETFs, even amongst those that track the same index, so be sure to understand what those are as well as considering the suitability of an ETF against your individual needs and risk tolerance before purchasing. BlackRock has not considered the suitability of this investment against your individual needs and risk tolerance. The data displayed provides summary information. Investment should be made on the basis of the relevant Prospectus.

  • Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.
  • The price of the investments may go up or down and the investor may not get back the amount invested. Your income is not fixed and may fluctuate.
  • The value of investments involving exposure to foreign currencies can be affected by exchange rate movements.
  • Diversification does not ensure protection against investment loss.

The variety of available ETFs mean that you could

 

What are ETFs Icon What are ETFs Icon What are ETFs Icon What are ETFs Icon
invest in a single
ETF as a core
exposure to
complement your
portfolio
fine tune your
preferred
exposure in a
particular region, commodity or
asset class
build an entire
investment
portfolio
using low cost
ETFs
create a blended
portfolio
using active
mutual funds and
index investments
Learn more about ETFs and why you might consider iShares.

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