Investing & Markets

ETF (Exchange-Traded Fund)

A fund that holds a basket of assets and trades on an exchange like an individual stock.

ETFs can track an index, sector, commodity, or strategy, and unlike mutual funds, they trade throughout the day at fluctuating prices rather than being priced once at market close. Most ETFs have lower expense ratios than actively managed mutual funds and offer built-in diversification in a single trade.

Not to be confused with: Mutual funds, which are priced once daily and often have higher minimum investments.

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