An Exchange Traded Fund (ETF) is a combination of the best features of conventional investment funds and individual stocks.

ETF aims to track the performance of a specific market index. If, for example, the Ukrainian equities index of the Ukrainian Stock Exchange grows by 30%, the ETF which tracks the index must also grow by 30% before expenses.

ETFs are characterised with high liquidity. The fund’s certificates are freely traded on the order-driven market, enabling investors to buy and sell them on a stock exchange even intraday.

Benefits and opportunities

- Diversification – with purchasing only one security, investor buys underlying portfolio of assets.

- Easy to use – it is possible to buy and sell the exchange traded fund’s certificates at any time from any trading platform. Purchasing certificate, investor actually “buys market portfolio”.

- Transparency – passive strategy of portfolio management stipulates that investor always knows composition and structure of the fund’s portfolio, which has to correspond composition and structure of the underlying index.

- Low cost – expenses of exchange traded funds are considerably lower than of the corresponding investment funds.

- Liquidity - the exchange traded fund’s certificates can be easily traded on stock exchange as common stock, even intraday.

- Stock exchange instrument – exchange traded fund’s certificate can be used in any stock exchange operations, e.g., short selling or trading on leverage. Besides, investment into exchange traded fund allows building different individual investment and trading strategies.

Comparison of exchange traded funds, investment funds and stocks

  ETF
Investment fund
Stocks
Pricing Real time End of the day Real time
Purchasing Price Market NAV Market
Purchasing procedure Broker AMC, agents Broker
Investment strategy

Passive management

Active management

Independent management
Diversification High Different No
Liquidity High Low Different
Operations with asset Buying/selling,
trading on leverage, intraday

Buying/selling from 13:00

Buying/selling,
trading on leverage, intraday
Investors’ expenses Broker’s commission

Success fee, management fee, broker’s commission

Broker’s commission

How to invest in the ETF

Investing in "Index UX" ETF is extremely simple. There are several ways to purchase fund’s certificates:

- Make a purchase at the "KINTO" office;

- Use our "Digital Signature: buy from home” service, which allows to buy and sell securities remotely;

- Use our internet trading service to buy and sell fund’s certificates along with other shares of Ukrainian stock market at any time from your own computer;

- Ask any broker company with access to the Ukrainian Stock Exchange to buy certificates for you directly from the market.

 

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