What is an Exchange-Traded Fund (ETF)?
An Exchange-Traded Fund (ETF) is an investment fund that is traded on a stock exchange, just like regular shares. It consists of a basket or portfolio of various assets, including stocks, bonds, commodities, or other securities.
How Does an ETF Work?
Diversified Investment: By purchasing a single unit of an ETF, an investor gains exposure to multiple assets.
Market Availability: ETFs can be bought and sold on the stock exchange throughout the trading day, making them more flexible than traditional mutual funds.
Price Determination: The price of an ETF fluctuates based on the market value of the assets it holds.
Types of ETFs
Stock ETFs – Contain shares of various companies, such as the S&P 500 ETF.
Bond ETFs – Comprise different types of bonds, including government or corporate bonds.
Commodity ETFs – Invest in commodities like gold, oil, or agricultural products.
Index ETFs – Track a specific index, such as KSE-100 or S&P 500.
Sector & Industry ETFs – Focus on specific industries like technology, healthcare, or energy.
Active & Passive ETFs – Most ETFs are passive, meaning they track an index, but some active ETFs exist where fund managers make investment decisions.
Benefits of Investing in ETFs
Low Cost: ETFs usually have lower fees than mutual funds.
Diversification: Since an ETF holds
