Question: Would you mind explaining a little about exchange traded funds (ETFs). I notice they’re not cheap to invest in. Do they pay a dividend or do they simply represent (hopefully) a gain in the value of a stock?
Answer (By Paul Rickard): Most ETFs passively track an index, such as the S&P/ASX 200. Because the ETF invests in the underlying shares that make up the index, it receives dividends and then passes on the income as a distribution to its unit holders. Typically, distributions from the ETF are paid quarterly.