Exchange traded funds (ETFs) are passively managed funds which are traded on the stock market.
The goal of an ETF is to accurately reproduce developments in a stock market index.
Example: An ETF based on the SMI index will follow the exact market rates of that blue-chip Swiss stock exchange as closely as possible.
As an investor, an ETF gives you the opportunity to participate in the development of an entire market and at the same time, to diversify your investments.
Another benefit of ETFs is their low cost: they are usually much cheaper than actively managed investment funds because they employ a passive management strategy.