exchange-traded fund

An exchange-traded fund (ETF) is a type of investment that pools money from many investors to buy a diversified mix of assets, such as stocks, bonds, or commodities. Unlike mutual funds, ETFs are traded on stock exchanges like individual stocks, so their prices fluctuate throughout the trading day. They offer a convenient way to invest in a broad market segment with typically lower costs and flexibility. Think of an ETF as a basket of investments that you can buy or sell easily, providing diversification and exposure to specific markets or themes without needing to select individual securities.