What are ETFs?

Contributor: London Stock Exchange |

An exchange-traded fund (ETF) is an investment fund usually designed to track a particular index. This is typically a stock market index, such as the FTSE 100.

In effect, ETFs provide you with exposure to indices in equities, bonds, commodities or a mix of those assets. By buying the whole basket of securities rather than individual assets, you are able to hit certain geographies and industries helping you reduce the risk of betting all your money on one company. 

ETFs are traded on stock exchanges just like shares and can be purchased through a stockbroker using a share dealing account, ISA or SIPP. While you might have to pay Stamp Duty Reserve Tax on shares you buy, ETFs are not liable for tax. They have been growing in popularity because of the perceived benefits:

  • Ease of access: there are thousands of ETFs available globally, giving investors access to a wide range of markets
  • Diversification: ETFs help to mitigate risk because they are spread across a large number of underlying securities
  • Transparency: most ETFs are considered to be very transparent because they disclose their full holdings online each day
  • Cost efficiency: ETFs are passively managed, which means you don’t pay a fund manager to pick securities for you
  • Liquidity: they are traded on stock exchanges, which means you can buy and sell them during trading hours.

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What are stocks and shares?

Contributor: London Stock Exchange |

When you trade on our markets you invest in specific securities, such as shares. London Stock Exchange offers trading shares in companies, from the very biggest to those showing potential for rapid growth. Shares, which are also known as equities, are the basic unit of investment i

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What should you consider before investing?

Contributor: London Stock Exchange |

Financial markets provide a marketplace for you to buy and sell assets like shares, bonds, currencies, derivatives and even physical products like commodities. London Stock Exchange offers a marketplace for those securities.


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Why investing matters?

Contributor: London Stock Exchange |

Everyone has financial goals. You may want to fund your retirement, help your children with their education or with important life events, such as buying a home.

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Investing in assets such as company shares offers you the potential

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