- BenutzernameMoneyland User Questions
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April 11, 2017, 5:40:01 PM
What differences are there between ETFs and index certificates which are based on the same index? Is there a difference?
ETF vs index certificate
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- BenutzernameMoneyguru von moneyland.ch
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April 12, 2017, 11:14:38 AM
Hi there,
An exchange traded fund (ETF) is an investment fund which tracks the performance of an index (generally a stock exchange index). An index certificate or index-linked certificate is a debt instrument which tracks the performance of an index.
The main difference between ETFs and index certificates for investors is that ETFs offer greater security. The reason for this is that fund shares are segregated assets which remain in your possession when your custodian bank or the ETF issuer goes bankrupt. Certificates are not segregated assets and become worthless when your custodian bank or the certificate's issuer fails.
Other than that, both instruments have advantages and disadvantages for different types of investments.
Best regards from Moneyguru
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