ETFs are exchange-traded funds considered attractive for their low-cost exposure to domestic and overseas stocks and bonds, and can be traded during the day like stocks. About 450 are listed in Japan, mainly products designed to track stock indexes.
An ETF is a type of investment trust listed on an exchange, where its price moves during market hours in the same way as a stock. Unlike unlisted investment trusts, ETFs offer the flexibility to place orders while watching the market price.
There are about 450 ETFs in the domestic market. Index-based products predominate, with many designed to track benchmarks such as the Nikkei 225 and the Tokyo Stock Price Index (TOPIX). Low-cost management is generally cited as one of their attractions.
Some ETFs invest not only in domestic and overseas equities but also in bonds, and are often used as a means of diversification. Investors can obtain convenient exposure to multiple asset classes by selecting indexes aligned with their investment objectives.