exchange traded funds

dboswell

can anyone explain what these are, the risks and returns.

I have about £30,000 in savings and want to invest half into various things now rates are so low.

tradetime

It's a security that tracks usually an index of some sort, for example a broad index like the FTSE or S&P500, or a sector index like the Philadelphia Semi conductor index, or perhaps a commodity index. Essentially, it gives you the diversification of owning a whole gruop of companies or commodities in onestock, that trades on an exchange all day, just like any other stock where it can be bought and sold just like any other stock. Traded long or short and on margin.
Risk like any other stock or index, it might go down when you're long or up when you're short. The returns are usually very close to the underlying index that it is tracking.

Here's an example of a UK one that tracks the US Russel 2000 smallcap index
http://www.etfsecurities.com/fund/etfs_fund_2000_fund_gb_en.asp