What are ETFs and ETCs?
An Exchange Traded Fund (ETF) is a security that tracks an index, commodity or basket of assets like an index fund, but trades like a stock on an exchange. Indices that ETFs track include currencies, commodities, stocks and bonds. The funds are managed passively, duplicating the performance of the index or benchmark that they are tracking. By offering the choice of a regional or a sector focus, ETFs provide low-cost diversification for your investment portfolio. These popular products blend the simplicity and value of investing in shares with the benefits of investing in mutual funds.
ETFs are versatile and include Inverse (or Short) ETFs and Leveraged ETFs. Inverse ETFs copy the inverse performance of the index or benchmark, which gives investors the opportunity to take advantage of weakening prices. Leveraged ETFs, on the other hand, provide a fixed amount of leverage – generally around 2:1 or 3:1 – on an index’s performance.
Like ETFs, Exchange Traded Commodities (ETCs) are open-ended securities which trade on a stock exchange, however instead of tracking a stock market index they track an underlying commodity index. The range of commodities and commodity indices that ETCs track include oil, wheat and gold. As they offer transparent pricing with low costs and high liquidity, ETCs allow you to diversify your portfolio and spread your risk in a simple, yet effective, way. There is also no need to roll contracts.
How we can help
We make available a variety of ETFs and ETCs, providing you with a low-cost, uncomplicated and individualistic way in which to access global stock and commodity markets. Both ETFs and ETCs are listed on stock exchanges and are traded and settled in the same way as stocks. By investing in these products you benefit from a variety of market, limit and stop orders.