What is a 'Exchange-Traded Fund (ETF)'?

An Exchange-Traded Fund (ETF) is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.

Sharper Insight. Smarter Investing. Manage Preferences TERM OF THE DAY Exchange-Traded Fund (ETF) An ETF, or exchange-traded fund, is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors. Breaking it Down: An ETF is a type of fund that owns the underlying assets (shares of stock, bonds, oil futures, gold bars, foreign currency, etc.) and divides... Read More Related to "Exchange-Traded Fund (ETF)" Mutual Fund Vs ETF: Which is Right For You? Want to invest but don't understand the difference between investment products? Here we explain ETFs vs. Mutual Funds and which is right for you. Read More When Is the Right Time to Change From Mutual Funds to ETFs Find out how to determine when it's the right time for you to switch from mutual funds to ETFs, including the benefits of ETFs and who they are best for. Read More Building an All-ETF Portfolio Balance is the key when selecting an all-ETF portfolio that will hedge against market volatility. Read More Related Definitions No-Fee ETF An exchange-traded fund (ETF) that a broker does not charge a commission or fee to be traded. Read More ETF Sponsor The company or financial institution which creates and administers an exchange-traded fund. Read More Net Asset Value - NAV Net asset value (NAV) is value per share of a mutual fund or an exchange-traded fund (ETF) on a specific date or time. Read More Redemption Mechanism Refers to how market makers of exchange traded funds (ETF) can reconcile the differences between net asset value (NAV) and market values when shares of the ETFs are bought and sold. Read More You are currently subscribed as: mondemand.forex@blogger.com Unsubscribe  |  Manage Subscriptions Investopedia, LLC, A Division of IAC. 114 West 41st St, floor 8, New York NY 10036 Copyright © 2018, Investopedia, LLC. All Rights Reserved Follow Us: