Exchange-Traded Funds (ETFs)
What is an exchange traded fund (ETF)?
Exchange-Traded Funds (ETFs), are funds you can trade just like a stock. ETFs / exchange-traded funds are thus an investment portfolio that can consist of shares, commodities or interest rates and can be bought and sold in real-time. This contrasts with a daily traded fund with only one closing price per day.
An ETF is an investment product that gives a diversified exposure to a sector, or an index, without the investor having to put together the portfolio himself. ETFs follow an underlying index, for example, the AuAg Gold Mining ETF tracks the AuAg Solactive ESG Gold Mining Index.
What are the different types of ETFs?
There are several types of ETFs:
- Equity ETFs: Follows an equity index, such as global corporations, small companies in Asia, etc.
- Bond / interest rate ETFs: Contains interest-bearing instruments.
- Commodity ETFs: An effective way to access investments in commodities such as gold, silver, copper, lithium and oil. Under assets in an ETF can be derivatives or certificates that invest in the underlying asset.
- Sustainability ETFs: Exchange-traded funds with an investment strategy that promotes sustainability and takes ESG factors into account.
How to buy an ETF and exchange-traded funds?
ETFs/Exchange-traded funds can be bought and sold in the same place as you trade shares. Swedish platforms that offer exchange-traded funds include, for example, Avanza and Nordnet. Banks also offer to trade in these funds. They are most easily found by searching for the ETF's name, ticker or ISIN code.
The fee you have to pay to trade ETFs is usually lower than the fee for daily traded funds. The fee generally consists of two parts:
Brokerage is the fee you pay when you buy and sell ETFs. The same fee as when you buy and sell shares.
The management fee is the current fee that covers costs for managing and operating an ETF. This fee is usually 0.2–0.8% and depends on how the ETF is constructed and its focus.
*More information on a specific ETF fee can be found in the product fact sheet.
A gold ETF is an exchange-traded fund that gives the investor the opportunity to invest in gold. As an investor in a gold ETF, you can get exposure to the companies that mine gold, so-called gold miners. To get exposure towards physical gold, an investor can buy an Exchange Traded Commodity (ETC). Through an investment in a gold ETF, the investor can gain effective exposure to the price development of the precious metal without owning the physical commodity. An ETF with a focus on companies that dig up gold contains several companies, which results in diversification and reduced concentration risk. The AuAg ESGO ETF, for example, consists of a portfolio containing 25 gold mining companies.
Why invest with AuAg Funds
AuAg offers funds that focus on providing exposure to precious metals and green tech elements. What they have in common is that these assets offer protection against monetary inflation and are necessary for the transition to a green world – trends that are highly topical today. AuAg's funds fit well into a portfolio of traditional assets as they have low covariation with equities in particular. AuAg manages the funds AuAg Silver Bullet, AuAg Essential Metals, and AuAg Precious Green as well as the exchange-traded fund AuAg Gold Mining ETF. The ETF offers exposure to an equal-weighted basket of 25 ESG-screened companies active in the gold mining industry. The ETF follows the Solactive AuAg Gold Mining Index, which tracks the gold mining companies with the lowest ESG risk score. It can be traded on most stock trading platforms across Europe and is listed on major European exchanges.