You have probably heard of mutual funds, which is a place to put your money if you want to forget about it for a while. But now there is a hot new fund in town called an Exchange Traded Fund (ETF).
An ETF is a type of fund which trades like a stock on the Pakistan Stock Exchange (PSX), has lower management fee than mutual funds, and tracks specific indices such as the KSE100. Globally, ETFs are worth $ 10 trillion. In Pakistan, however, the ETF market is still in its nascent stages with just below $ 4 million (Rs 850 million) of assets under management (AUM).
Today we try to understand these ETFs, what kind of ETFs are available on the PSX, and we look at one ETF in particular, the National Bank of Pakistan Growth ETF (NBPGETF).