ETFs became popular and wide-spread due to their low costs, transparency and liquidity.

ETF (Exchange Traded Fund) is an investment fund in the form of an individual asset complex (Sondervermögen), which is exchange traded and in most cases has passive management strategy.

The popularity of this investment instrument has increased significantly in recent years, the investment volumes in this kind of assets continuing their rapid growth. 

ETFs gained popularity due to their low accompanying costs, transparency and liquidity. 

ETFs realize the passive portfolio management strategy. This fund structure usually reproduces that of the index it is based on (e.g., DAX shares structure, Dow Jones etc.).

There are, of course, ETFs, specializing in fixed income bond, which reproduce, for example, b.rexx® Jumbo Pfandbriefe Index, as well as various bond indices.

The advantage of ETFs is that they fully reproduce the corresponding indices structure, which eliminates portfolio managers' wrong decision risks (the so called human factor). Besides, the investors save a lot on commission expenses, as ETF does not require active management.

Another advantage of ETFs is that shares or bonds, included into the corresponding index, are actually purchased and constitute an individual asset complex. 

ETFs allow investors to achieve maximum investment diversification, at the same time minimizing purchase and day-to-day management expenses.

The fact that actively managed funds, as a rule, reveal lower profitability as compared to their benchmark, also speaks in favour of ETF.

ETF also provides investors with the necessary fund allocation by asset classes (Allokation). 

As previously mentioned, ETF assets are legally separated from the fund and in case of its insolvency are subject to return to the investors.

ICFB experts will advise you on all issues related to investing in ETF.