ETF investing and ETFs

1

ETFs are a cost-effective way to diversify your investments

Exchange-traded funds (ETFs) are an easy, inexpensive and efficient way to seek returns. They’re a great choice for investors who want to lower their investment risk by diversifying at low cost.

2

Real-time trading on stock exchanges

ETFs are traded on stock exchanges in the same way as stocks. You can buy and sell ETFs during stock exchanges’ opening hours.

3

ETFs provide unlimited opportunities

You can invest anywhere – we offer almost 1,000 ETFs throughout the world. Diversify your investments across geographies, or between sectors, commodities, currencies or fixed-income securities.

Go to ETF trading

ETF investing and ETFs

ETFs (exchange traded funds) automatically invest their assets in stocks in accordance with the index they track. ETFs are mainly passive funds without active portfolio managers. This makes ETF investing very cost effective.

You can invest in ETFs via OP-mobile and the op.fi service (in Finnish) on the Finnish, Swedish and German markets, where you can trade in over 1,000 different ETFs. Extending your portfolio to global (particularly European) markets is easy and cost-effective with ETFs. You can find lists which sort ETFs by factors such as geographical market, megatrends, responsibility and emerging markets, as well as leveraged, crypto and fixed-income ETFs.

Try the ETF search engine

Use our search engine to take a look at our wide range of ETFs. You can use a range of criteria to search for and filter ETFs. Once you’ve found an ETF that suits you, read the fund’s Key Investor Information Document and Fund Prospectus. They provide information on what kind of investment product the ETF is and the component stocks of the tracked index.

Explore the ETF search engine (in Finnish)

We only broker ETFs that have a marketing licence – in other words, that are registered in Finland.

ETFs, or exchange traded index funds

Although most ETFs are passive index funds, a wide range of ETFs is available on the markets:

  • An inverse ETF invests inversely to the benchmark index performance. The goal is that the ETF’s value will rise as the equity market declines.
  • A leveraged ETF seeks, say, a double or triple return relative to the benchmark index.

Most ETFs pay a dividend on their units based on the dividends paid on the fund's holdings. The dividend payment dates vary by ETF. As a rule, dividends are paid out monthly, quarterly, semi-annually or annually. Some ETFs do not pay out dividends but reinvest them in the ETF, increasing the value of the ETF unit.

Any capital gains and dividends from ETFs are subject to tax in accordance with the capital income tax rate. More information on taxation is available on the website of the Finnish Tax Administration.

How do I start investing in ETFs?

To start investing, you need to open an investment service package. You then invest via OP-mobile and the op.fi service in a similar way to stock trading. To confirm an order, you must acknowledge that you have read the ETF’s Key Investor Information Document. The trading fee is the same as in stock trading and depends on the market place.

Physical ETF and synthetic ETF – what’s the difference?

Exchange-traded funds (ETFs) can be divided into two categories based on their structure:

  • traditional physical, or cash-based, ETFs
  • synthetic, or swap-based, ETFs

Both have their pros and cons. Both track the same index and seek the same return.

A physical ETF owns the securities that make up the index it is tracking. The ETF may be exposed to a counterparty risk if it seeks additional returns through stock lending, in other words by lending stocks it owns to investors with no holdings in the ETF.

Because synthetic ETFs use derivative contracts to achieve their targeted return, they involve a counterparty risk. The risk arises from uncertainty about whether the counterparty to each derivative contract can fulfil its payment obligation towards the ETF.

What is a thematic ETF?

A thematic ETF is an ETF with an investment philosophy based on a particular theme. Thematic ETFs are popular due to the specific global megatrends they align with, which people want to promote by investing. Thematic ETFs can be aligned with themes such as technological breakthroughs, ageing population, and clean energy production as a way of combatting climate change.

To help you choose between options, we have put together an exhaustive list of the thematic ETFs on the market.

Find out more about thematic ETFs (in Finnish) (pdf)

How to start investing in stocks
This is how to get started and seek return on stocks.
International equity investment

More options. You will have thousands of shares from 15 different market venues around the world available to you along with over 2,000 ETF’s.

This is an advertisement. Investment services are provided by OP cooperative banks. Please note that investing always involves risks. The value of investments can rise and fall, and an investor can lose part or all of the money they invest.