What are Exchange-Traded Funds (ETFs)?
Just like Unit Trusts, an exchange-traded fund (ETF) allows investors to buy a little bit of many different companies just from one investment. An ETF is a basket of securities (like stocks) you buy or sell through the stock exchange (Bursa Malaysia). ETFs track indices (or indexes) that either comprise of baskets of equities and bonds or tracks the value of a particular commodity (like gold, for example).
(An index is a grouping of all stocks in a particular category. For example, the FTSE Bursa Malaysia KLCI index is taken from the largest 30 companies listed on the Bursa Malaysia stock exchange, while the FTSE Bursa Malaysia EMAS Index tracks Syariah compliant companies)