InsiderFlow › Glossary › What is an ETF?

What is an ETF?

An ETF is an exchange-traded fund that tracks an index: with a single purchase you buy hundreds of securities, at very low cost.

ETF stands for Exchange Traded Fund: a basket of securities (stocks, bonds, commodities) that trades on an exchange like a single stock. Most ETFs passively track an index, such as the S&P 500 or MSCI World.

The advantage is instant diversification at very low cost: annual fees (TER) of a passive ETF are often below 0.2%, versus 1.5–2% for many traditional mutual funds.

Concrete example

Buying one share of an S&P 500 ETF gives you proportional ownership of all 500 largest US companies — Apple, Microsoft, Nvidia and the rest — in a single trade.

How you see it in InsiderFlow

On InsiderFlow these concepts come alive on real data: what big funds and insiders are buying, explained every day.

Frequently asked questions

Do ETFs pay dividends?

It depends: "distributing" ETFs pay them to your account, "accumulating" ETFs reinvest them automatically.

What's the difference between an ETF and a mutual fund?

An ETF trades on an exchange in real time and usually tracks an index at low cost; a mutual fund is bought through intermediaries and often has pricier active management.