ETF (Exchange-Traded Fund)

is a type of investment fund with free exchange circulation of shares according to the same rules as other stocks. Thus, the fair price of an ETF share is determined daily (except weekends and holidays) based on market quotes, but the volatility of ETF shares is to be limited due to the possible Provider’s market-makers interventions and indirect ownership of assets which could be subjects for trading speculations. That point is crucial for ETFs: the fair price of their shares fluctuates throughout the trade day unlike the fair price of other MF’s shares which is defined at the end of the trade day. ETF can be structured as complexly as you like: from a commodity index to a portfolio of assets with different risk rates, duration and sectors, however often it is tied to a particular stock index (i.e. the structure of the fund's assets repeats the structure of the index). Moreover, ETF could be managed with one or another investment strategy, for example, constant income, anti-inflation or hedging currency or sector risks strategies. So, ETFs differ in terms of management action (passive, which involves linking to a particular stock index, or active, which allows a freer choice of investment objects), investment objects (mainly stocks or bonds, the sector of the main economic activity of the issuer of the fund's portfolio securities, a portfolio of currencies, commodities, derivatives, crypto assets), and income generation strategy (inverse funds, leveraged funds).