ETFEurope Research Hub

An intelligent ETF (Exchange Trade Funds) platform makes your next investment choices faster and easier.

All you need to know about European ETFs

all you need to know

ETFs stands for Exchange Traded Fund. At its core, ETFs share many features of passively managed mutual funds. However, as its name “Exchange Traded” stands, it provides the benefit of being traded on an exchange like common stocks.

How ETFs are traded, what different prices of ETF mean to investors, and the best practices of trading ETFs.

ETF vs. Mutual Fund Creation and redemption process in primary market happens only between Authorised Participants (AP) and ETF sponsor/issuers. It occurs once a day, after market close, priced at Net Asset Value (NAV) — the fund official closing price.

ETFs at the secondary market trade continuously during the day at the market price, or bid/offer price, which is different to NAV.

Retail investors with small investment budget buy and sell ETFs at the secondary market during the market open. The purchase or sale of ETFs is better off to be transacted via limit order instead of market order.

ETF vs. Mutual Fund, a simple and complete comparison

ETF enjoys the advantage over Mutual Fund over real-time price, the capability of intra-day trading, low cost, greater transparency, and no minimum investment requirement.