What Is ETF (Exchange-Traded Fund)?

An ETF is a basket of assets that trades on an exchange like a single stock, giving instant diversified exposure to many holdings at once.

Definition

An exchange-traded fund, or ETF, is an investment fund that holds a basket of assets, such as stocks, bonds, or commodities, and trades on an exchange like an individual stock.

Buying one share of an ETF gives you proportional exposure to all its underlying holdings, making instant diversification simple and affordable. Many ETFs track an index, sector, or theme.

ETFs are popular for their low costs, transparency, tax efficiency, and intraday tradability. You can buy or sell them anytime the market is open, unlike traditional mutual funds priced once a day.

There are ETFs for almost everything, from broad market indexes to gold to specific industries and even crypto. They are a core building block for diversified, low-effort portfolios.

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