Exchange traded funds (ETFs) are mutual funds traded on equity-exchanges, which are based on an index and aim to reflect the performance of its base index to the investors.
ETFs are issued based on an index, and invest in the securities on its base index in proportion to their weight in the index. Therefore, for example, an investor willing to invest in BIST-30 index invests in an ETF rather than purchasing the equities of the index separately, and has the opportunity to invest in that index, and benefits from the proceeds of the index.
Exchange traded funds are portfolios created by authorized intermediary institutions through the purchase of securities on the base index using the cash collected from investors. ETFs reflect the returns on the equities or other instruments (gold, bond, foreign exchange, etc.) on the base index.
The basic characteristic of ETFs is that their participation certificates can be traded on Borsa İstanbul just like equities. Exchange traded fund shares can be traded on the Borsa İstanbul Fund Market through intermediary institutions like equities.
