UBS ETF In order to proceed, you must confirm that you are an institutional investor based in Spain.

For marketing and information purposes by UBS. CNMV registration number (Comisión Nacional del Mercado de Valores): .  Representative in Spain for UBS funds established under foreign law: UBS Bank, S.A., MARÍA DE MOLINA, 4, E-28006 MADRID. Prospectuses, simplified prospectuses or Key investor information, the articles of association or the management regulations as well as annual and semi-annual reports of UBS funds are available free of charge from UBS, MARÍA DE MOLINA Nº 4, 28006 MADRID / AVENIDA DIAGONAL Nº 640, 2º A, E-08017 BARCELONA / FERNÁNDEZ Y GONZÁLEZ Nº 2, PLANTA PRINCIPAL, E-41001 SEVILLA / C/ROGER DE LAURIA Nº 7, 1ª PLANTA, 46002 VALENCIA / COSO Nº 33, 5º A, 50003 ZARAGOZA, CANTÓN PEQUEÑO 15, 4º, 15003 A CORUÑA. Before investing in a product please read the latest prospectus carefully and thoroughly. Units of UBS funds mentioned herein may not be eligible for sale in all jurisdictions or to certain categories of investors and may not be offered, sold or delivered in the United States. The information mentioned herein is not intended to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not a reliable indicator of future results. The performance shown does not take account of any commissions and costs charged when subscribing to and redeeming units. Commissions and costs have a negative impact on performance. If the currency of a financial product or financial service is different from your reference currency, the return can increase or decrease as a result of currency fluctuations. This information pays no regard to the specific or future investment objectives, financial or tax situation or particular needs of any specific recipient. The details and opinions contained in this document are provided by UBS without any guarantee or warranty and are for the recipient's personal use and information purposes only. This document may not be reproduced, redistributed or republished for any purpose without the written permission of UBS AG. Source for all data and charts (if not indicated otherwise): UBS Asset Management

ETFs – an introduction What is an Exchange Traded Fund and how do they work?

Exchange traded funds (ETFs) are among the most popular investment instruments and fastest growing investment products in the fund industry. They combine the benefits of stocks and funds whilst offering investors the opportunity to invest inexpensively, flexibly and transparently in entire markets, thus diversifying their portfolio with one single transaction.

What is an exchange traded fund (ETF)?

An exchange traded fund is an investment fund that tracks the performance of its underlying index and can be bought and sold on the stock exchange. Like a traditional fund, an ETF is a mutual fund and thus unaffected by any insolvency of the ETF provider. It allows the benefits of a collective investment fund yet trades like a share. ETF trading can be done on the stock exchange or over the counter at any time of the day. As ETFs are pegged to an underlying index, they are passive investment vehicles that merely replicate the performance of their underlying asset. In other words, when the underlying index increases in value, the value of the ETF increases likewise. 

The first ETFs were listed in the US in 1993 and Europe from 1999. Since then, a steadily increasing number of them have become available. Traditionally ETFs are passive index funds but actively managed ETFs have also come into play since their authorisation in 2008 and require a portfolio management strategy.

Exchange traded funds are available in a wide range of underlying asset classes (e.g. stocks, bonds, commodities, real estate). Whether purchasing a single ETF that exposes the investor to a specific market, or a selection of ETFs over multiple markets, exchange traded funds are an excellent way to create a balanced investment portfolio. Both new and experienced investors should look to them for competitive, cost-effective and long-term results.

What are the key characteristics of ETF Trading?

Diversification

ETFs provide you with the opportunity to diversify your portfolio in a very inexpensive and efficient manner by distributing risk across multiple risk carriers, allowing you to optimize the risk profile of your investment. Because ETFs track an index, you can cover an entire market with just a single transaction.

Flexibility

ETFs are easy to buy and sell – including on an intraday basis. Investors are able to act on market views within seconds. Due to these characteristics, ETFs can be used as part of an investment strategy in a variety of ways: for long-term growth, for short-term trading opportunities and for hedging part of a portfolio.

Security

Like traditional funds, ETFs are mutual funds. They are unaffected by any insolvency of the ETF provider or custodian bank as the fund's assets are not included in the bankruptcy estate.

Transparency

ETFs are particularly transparent investment instruments because they match the performance of the underlying index, net of fees. All key trading and other information can be viewed on an intraday basis or in real time. UBS ETFs calculate the indicative net asset value every 15 seconds during normal trading hours.

Cost efficiency

ETFs do not incur any issue or redemption surcharges – just the transaction costs of buying and selling an ETF. Moreover, only a minimal management fee is charged.


Find further information on our Frequently-Asked-Questions page