An "index fund" describes a type of mutual fund or investment trust whose investment objective typically is to achieve approximately the same return as a particular market index. An Exchange Traded Index Fund is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETIFs experience price changes throughout the day as they are bought and sold. ETIFs, commonly referred to as index-based ETFs, are designed to track the performance of their specified indexes or, in some cases, a multiple of inverses of their indexes. Some people will agree that international investments is good. It allows investors to reduce the risk of their portfolio, but still allowing them with additional profit potentail. If you have the money to spend you would suggest that you invest in international investments. The return and the risk of an investment will depend on the actual currency that was used.
The exchange Traded Funds passive nature is a necessity: the funds rely on an arbitrage mechanism to keep the prices at which they trade roughly in line with the net asset values of their underlying portfolios. For the mechanism to work, potential arbitragers need to have full, timely knowledge of a fund's holdings. ETFs are different from Mutual funds in the sense that ETF units are not sold to the public for cash. Instead, the Asset Management Company that sponsors the ETF (Fund) takes the shares of companies comprising the index from various categories of investors like authorized participants, large investors and institutions. In turn, it issues them a large block of ETF units. Since dividend may have accumulated for the stocks at any point in time, a cash component to that extent is also taken from such investors
Some of the advantages using Exchange trade funds is that it provides is that they can be either