Written by An ETF (Exchange-Traded Fund) is a type of investment fund that holds a collection of assets such as stocks, bonds, or commodities. Similar to a mutual fund, an ETF provides diversification by investing in multiple securities. The key difference is that ETFs are traded on stock exchanges like individual stocks, meaning they can be bought or sold throughout the trading day. ETFs tend to have lower fees compared to mutual funds and can be a more cost-effective way to diversify a portfolio. Many ETFs track market indices, such as the S&P 500, providing exposure to a broad range of companies.
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