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Exchange-traded funds (ETFs) are funds that hold a portfolio of assets, such as stocks or bonds and are traded on an exchange. They are typically designed to track the performance of an index or asset class. Investors own units of the fund, not the underlying assets directly.

Some ETFs can hold a wide range of assets across different companies, sectors, or regions, allowing you to gain broad exposure with one investment. However, not all ETFs are broad and some focus on specific sectors, countries, or themes, so it’s important to check what each ETF invests in.

It’s important to note that not all ETFs are simple index trackers. Some may be leveraged and/or inverse products and typically carry higher risk.

ETFs can be passively managed, meaning the fund is managed by it automatically holding the same assets in the same proportions as the index it aims to track. These are more common and typically offer lower costs.

ETFs can also be actively managed, meaning the fund is actively managed by professional portfolio managers who make decisions about which assets to buy or sell in an effort to outperform a benchmark.

These typically come with higher management fees and carry additional risks compared to passive ETFs.

Some ETFs pay dividends. However, dividends are not guaranteed, and the amount and frequency of payments depend on the ETF’s underlying holdings and its distribution policy.

ETFs can be accumulating or distributing. Accumulating ETFs reinvest dividends back into the fund, helping your investment grow over time. Distributing ETFs pay dividends in cash directly to you. The choice depends on whether you prefer your returns to compound or to generate income.

Investment accounts are managed by Revolut Securities Singapore Pte Ltd.