The right tool for the job

Exchange traded funds (ETFs) in Europe are now five years old. Since the first ETF was launched in the US in 1993, they have opened up a new panorama of investment opportunities. Essentially, ETFs are index funds that are listed and traded on exchanges like stocks. They allow investors to gain broad exposure to entire stock markets of different countries, emerging markets, sectors, styles, fixed income and commodities with relative ease on a real-time basis and at a lower cost than many other forms of investing. ETFs also can be used to short an index. They can be purchased on margin, ar...