ETF
An exchange-traded fund, ETF for short, is an investment fund that lets investors buy a large basket of individual stocks or bonds in one purchase.
All edits by Derek Coleman
ETF
An exchange-traded fund, ETF for short, is an investment fund that lets you buy a large basket of individual stocks or bonds in one purchase.
An ETF is a collection of stocks or bonds that may be purchased for one price. Unlike mutual funds, ETFs may be bought and sold during the entire trading day just like a stocks on an exchange. Many popular ETFs track well-known stock indexes like the S&P 500.
You could say that the ETF is a relative of the mutual fund, which is another way to purchase many stocks at one time. But there are a few major differences between ETFs and mutual funds. Whereas mutual funds tend to have human mutual fund managers who actively trade stocks in and out of the fund based on which ones they predict will go up or down, the vast majority of ETFs are unmanaged by humans.
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