Units of investment funds that are traded on a stock exchange and thus a consistent price determination takes place; sometimes in German also called Börsengehandelter Fonds. – In other meaning said of an index fund, namely the special fund launched and managed by a capital management company, which copies an index (which duplicates an index) and which are admitted to exchange trading. This allows an investor to gain exposure to an index without having to buy every security that makes up that index (without having to buy a title in every company included in this index). In this case, the investor’s assets move with the market – no better and no worse. It has been mathematically proven on the basis of (by reason of) price movements over a very long time series that for an individual investor the chance of doing better than the market is just under fifty percent. – In spring 2012, there were over 4,000 ETFs worldwide. Admittedly, not every one of these products is now as simple as it appeared to be a spider in the beginning. – See Exchange Traded Commodities, Funds, Real Estate Investment Trust, Commodity Funds. – Cf. Financial Stability Report 2011, pp. 33 f. (stability risks in ETFs; more detailed explanations on securities lending in ETFs), BaFin Annual Report 2011, pp. 25 f. (market volume of ETFs broken down; risks), Deutsche Bundesbank Monthly Report of January 2013, p. 18 (funds raised by special funds relatively stable), Financial Stability Report 2013, pp. 42 f. (liquidity risks in ETFs).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
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