In the press

How ETFs can help in building a diversified equity exposure

Tara O’Connor, FTAdviser, 29 September 2025:

Exchange traded funds are an efficient way of gaining exposure to equity indices while maintaining liquidity, according to advocates of the structure.

ETFs can track a market index, providing investors with diversification across the whole or part of a market.

In terms of diversification, one ETF can give investors access to hundreds of stocks. Index ETFs are designed in a way that replicates the performance of a benchmark index, like the FTSE 100 or S&P 500.

Senior research analyst at AJ Bell, Terry McGivern, says ETFs track indices in a “simple and efficient way”.

David Batchelor, senior fund analyst at QuotedData, says the equity ETF market remains larger than its fixed income counterpart.

“It is a well-established means of gaining exposure to equity indices in a low cost and highly liquid way, without having to buy each constituent share.

“Investors can gain index-wide exposure with the flexibility of owning a single security.” And as well as allowing investors to gain access to indexes, ETFs can be efficient in providing exposure to individual themes.

Batchelor adds: “Thematic ETFs offer exposure to a specific trend or sector, from clean energy to AI, through a specifically defined basket of companies, without the need for extensive research of the whole market.”

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