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Exchange Traded Funds (ETFs)

Definitions and characteristics

Advantages and disadvantages

ADVANTAGES
ETFs replicate the performance of illiquid markets, for which direct investment is not possible or would generate high costs.
ETFs allow for very broad diversification by allowing the investor to hedge an entire market instead of selecting individual securities.
ETFs generally have lower fees than UCIs
DISADVANTAGES
No possibility of outperforming the reference index.
ETFs do not provide a stable and/or guaranteed income; income varies according to the performance of the reference index.

What are the key risks?

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