ETF (Exchange-Traded Fund)

Definition

An ETF is a pooled investment fund that owns a basket of assets and trades on an exchange throughout the day, similar to a stock.

What ETFs can hold

• Stocks
• Bonds
• Commodities
• Specialized themes or sectors

Why ETFs are popular

• Instant diversification in one purchase
• Usually low expense ratios for broad index ETFs
• Easy to buy and sell during market hours

ETF vs mutual fund (quick view)

ETFs trade intraday like stocks, while mutual funds typically price once per day after market close. Both can be diversified, low-cost options depending on the specific fund.