ETFs - Exchange Traded Funds

ETFs are a popular choice for investors looking for exposure to the overall stock market with greater diversification.

Understanding ETFs

An Exchange-Traded Fund (ETF) is a mixed basket of investments, such as stocks, commodities and bonds, that is listed and traded on an exchange.

Because ETFs are made up of multiple assets, they provide greater diversification, and typically follow the ups and downs of an index. ETFs tend to trade close to their net asset value over the course of the trading day.

ETFs allow you to take exposures in the underlying assets of an ETF in a cost-effective manner without having direct exposures to the underlying assets.

Explore available ETFs

CHAESHIN Chimera S&P UAE Shariah ETF- Share class B - Income

Listed On Aug 17, 2020

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CHAE Chimera S&P UAE UCITS ETF - Share Class A - Accumulating

Listed On Mar 03, 2021

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Benefits of Exchange Traded Funds

ETFs have broad appeal for both personal and institutional investors for their flexibility, low risk and a number of other advantages:

Broad Diversification

An efficient way to diversify, covering most major asset classes and sectors. You get a broad selection without having to build your portfolio one security at a time.

Liquidity

ETFs are traded like stocks and offer the advantage of being liquid. You can buy or sell ETFs any time during trading hours and can also purchase on margin.

Low Cost

Relatively low management fees compared to traditional open-end funds.

Hedging

A great tool to hedge against other asset classes like currencies or equities.

Accessibility

While many mutual funds enforce a minimum investment, you can get started with a small amount of capital.

FAQs on ETFs

: An exchange-traded fund (ETF) is an Investment fund traded on stock exchanges, much like stocks. An ETF Unit holds assets such as stocks, commodities, or bonds, and trades close to its net asset value over the course of the trading day. Most ETFs track an index, such as a stock index or bond index.

: ETFs traded like stocks, ETFs offer the advantage of being liquid. They can be bought or sold any time during trading hours. They can also be purchased on margin, ETFs have low management fees.

ETFs are more accessible to small investors because investors can buy individual units of an ETF, while many mutual funds have minimum investments.

ETFs provide easier access to alternative investments, creating a broader range of investment opportunities. There are ETFs that invest in commodities and foreign exchanges, and offer the ability to invest extensively in foreign and emerging markets.

Diversified like a fund but trades like a stock.

: Unlike a mutual fund that has its net-asset value (NAV) calculated at the end of each month, an ETF's price is calculated and changes throughout the day, fluctuating with supply and demand.

: Yes, ETF Units trade like Shares.

: Yes, you can trade through your DFM licensed-broker.

: ETFs settle in two working days (T+2)

: Yes, you have to have a DFM NIN to invest in DFM-listed ETFs.

: No, there is no minimum and maximum on the number of units that can be bought.

: DFM Customer Service, T: 04 305 5555 or email: customerservice@dfm.ae

: Yes, which means that the Fund may pay dividends based on the dividends distributed by the portfolio of companies the fund is invested in.