Definition
ETFs are similar to mutual funds but trade like stocks on an exchange. They can track indices, sectors, commodities, or other assets. ETFs offer diversification, low expense ratios, and tax efficiency compared to mutual funds.
Example
SPY is an ETF that tracks the S&P 500 index. Buying one share gives you exposure to all 500 companies in the index.
FAQ
What is Exchange-Traded Fund (ETF)?
An investment fund traded on stock exchanges that holds a basket of assets.
Why is Exchange-Traded Fund (ETF) important?
Exchange-Traded Fund (ETF) helps investors evaluate investment vehicles and make more informed decisions.