All terms
ETF
An exchange-traded fund that tracks an index as closely as possible.
ETF stands for exchange-traded fund. An ETF automatically buys the stocks in an index, such as the DAX or the MSCI World. No fund manager picks stocks, so costs are usually low.
You buy ETF units like stocks through your brokerage account, as a one-off or via a savings plan (Sparplan). The fund's assets are held separately: if the fund company goes bust, they stay protected. You still carry the market risk of the stocks.
Example: a DAX ETF rises and falls almost exactly like the DAX, minus small running costs (TER). In Germany, ETFs are taxed under special fund rules, including the Vorabpauschale.