ETF
A fund listed on an exchange that usually tracks an index or a basket of assets. Compare TER, replication method and liquidity before buying units.
Definition
An ETF (Exchange-Traded Fund) is a fund listed on an exchange like a stock, usually tracking an index or a basket of assets. What matters when you choose one is the TER (annual cost), the replication method, the trading currency and liquidity — not just the “name of the index”.
Example
You buy an ETF on the GPW that tracks the WIG20 or a broad European index. You pay the market price plus commission and the bid–ask spread; over a long horizon the TER also affects your result. That is a different exposure from a single WIG20 company.
Anti-example / common mistake
An ETF is not a guarantee of the index return in every period (tracking error, costs, dividends). Do not confuse an equity ETF with a CFD on an ETF, or with an open-ended fund bought off-exchange — the costs and the way you acquire it are different.