What is ETF?

This stands for Exchange Traded Funds. Also known as ""composite"" or ""index shares"". ETF's are backed by a basket of securities. They track either the performance of an index (like the Xmatch from CS that tracks the SMI(r)) or hold a static baskets of shares (like the HOLDRS(r) from Merrill Lynch that hold a specified number of stock in specific US sectors, i.e. B2B Internet or Biotech) and are dealt on an Exchange. ETF's trade like any other stock (stop loss, limit orders and short sales) and are lendable and marginable. Redemption and subscription can only be made in form of the underlying securities of the ETF in large amounts. Retail clients are restricted to dealing on an Exchange.