ETF
An exchange-traded fund that tracks an index as closely as possible.
In short
As of 5 October 2026An ETF (exchange traded fund) is a fund traded on the stock exchange that tracks an index such as the DAX or the MSCI World as closely as possible. As nobody actively picks stocks, costs are usually low. You buy it like a stock, at once or through a savings plan. Its assets are held separately, but prices can fall.
ETF stands for exchange-traded fund. An ETF automatically buys the stocks in an index, such as the DAX or the MSCI World. No fund manager picks stocks, so costs are usually low.
You buy ETF units like stocks through your brokerage account, as a one-off or via a savings plan (Sparplan). The fund's assets are held separately: if the fund company goes bust, they stay protected. You still carry the market risk of the stocks.
Example: a DAX ETF rises and falls almost exactly like the DAX, minus small running costs (TER). In Germany, ETFs are taxed under special fund rules, including the Vorabpauschale.
Related terms
Sources
As of 5 October 2026 · Educational content, not investment or tax advice.