ETFs: A cheap route to income

Exchange-traded funds can be a great way to gain exposure to an entire index, sector, currency or commodity. Here's everything you need to know about buying ETFs.

Exchange-traded funds (ETFs) are simple and useful. At heart they're just funds that issue shares to investors. Rather than tracking the performance of a single firm, an ETF share tracks an entire equity index, sector, commodity, or even a foreign currency, without the expense or hassle of investing directly in the underlying products.

Take one of the biggest and oldest ETFs in the world, the US-listed SPDR S&P 500 (NYSE Arca: SPY), or spider' as it is known. This tracks the performance of America's top firms as represented by the S&P 500 index.

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MoneyWeek is written by a team of experienced and award-winning journalists, plus expert columnists. As well as daily digital news and features, MoneyWeek also publishes a weekly magazine, covering investing and personal finance. From share tips, pensions, gold to practical investment tips - we provide a round-up to help you make money and keep it.