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Understand what an ETF is, how to identify the correct fund and how to read the essential information.
What is an ETF? A simple explanation
An ETF, or exchange-traded fund, is an investment fund that can be bought and sold on a stock exchange. One ETF can give you access to many companies, bonds or other investments in a single purchase.
Read guide 02ETFs, shares and traditional funds: what is the difference?
A share is an ownership stake in one company. An ETF is a fund that usually holds many investments and trades on an exchange. A traditional investment fund also pools investors’ money, but it is normally bought or sold at a price calculated once each dealing day.
Read guide 03What does the ETF actually track?
An ETF is designed to follow an index or investment strategy. Before looking at its cost or past performance, make sure you understand what the ETF invests in and how investments are chosen.
Read guide 04ETF ticker, ISIN and fund name: what is the difference?
The fund name describes the investment. The ticker is a short code for an exchange listing. The ISIN is a 12-character code identifying the security or share class—a version of the fund with features such as income treatment or currency hedging. Use the ISIN when you need to confirm that you have found the correct ETF.
Read guide 05How do I read ETF documents: the factsheet, prospectus and KID?
Start with the factsheet for a quick overview, use the KID to compare risks and costs, and open the prospectus when you need the full legal detail. Match the ISIN on the factsheet and KID. For a prospectus covering several funds, find the correct fund and supplement; it may not list every share-class ISIN.
Read guide 06How do I read an ETF factsheet?
An ETF factsheet is a short summary produced by the fund provider. Read it in this order: exact share class, objective, index or strategy, holdings, concentration, risk, costs and performance. Check the data date before relying on any figure.
Read guide 07How do I read an ETF prospectus?
An ETF prospectus is the detailed legal document describing how a fund may invest and operate. Find the correct ETF section or supplement first. Then check what it can invest in, how it follows its index or strategy, the main risks, fees and rules for dealing or closure.
Read guide 08How do I read an ETF KID or KIID?
For an ETF offered to an Irish retail investor, look for the current PRIIPs Key Information Document, usually called the KID. Confirm the ISIN and share class, then read the product description, risk indicator, performance scenarios, costs and recommended holding period. Treat scenarios as illustrations—not forecasts.
Read guide 09Equity ETFs explained: what are you investing in?
An equity ETF provides exposure to company shares. Its value rises and falls with the companies and markets it invests in, so it can offer long-term growth potential but also substantial short-term losses.
Read guide 10Bond ETFs explained: how do they work?
A bond ETF provides exposure to bonds—loans to governments, companies or other organisations. It can provide income and diversification, but its value can fall when interest rates rise, borrowers become less creditworthy or the bonds become harder to trade.
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