ETF
An Exchange-Traded Fund is a basket of securities that trades on a stock exchange like a single share, typically tracking an index and offering low-cost, diversified market exposure.
An Exchange-Traded Fund (ETF) pools together many securities—stocks, bonds, commodities, or a mix—into a single tradable instrument. You can buy and sell an ETF on a stock exchange throughout the trading day, just like an individual stock.
Most ETFs are passively managed, meaning they track the composition of a market index rather than trying to beat it. This passive approach keeps management fees very low—often a fraction of a percent per year—making ETFs one of the most cost-efficient investment vehicles available.
ETFs combine the diversification of a mutual fund with the flexibility of a stock. They are available in thousands of varieties covering broad markets, specific sectors, countries, asset classes, and investment themes, making them suitable building blocks for nearly any portfolio strategy.
Disclaimer
This article is for educational purposes only and does not constitute financial advice.