← Glossary
ETF (exchange-traded fund)
A fund whose units are bought and sold on a stock exchange, like a share.
An ETF is a fund — a basket of shares, bonds or other assets — whose units trade on a stock exchange throughout the trading day. You buy and sell them through your broker at the market price, exactly as you would a share.
Most ETFs follow an index, such as the S&P 500, and charge a yearly fee taken from the fund's assets. An ETF is only as diversified as what it holds: one that follows a single industry is still a bet on that industry.