ETF stands for “Exchange Traded Fund.” It is a type of investment fund that is traded on stock exchanges, just like stocks. ETFs are designed to track the performance of a particular index, commodity, or basket of assets.
ETFs are similar to mutual funds in that they pool money from multiple investors to purchase a diversified portfolio of assets. However, ETFs are traded on exchanges like stocks, which means they can be bought and sold throughout the trading day at market-determined prices. This makes ETFs more flexible than mutual funds, which are typically only priced once per day.
There are many different types of ETFs available, including those that track stock indices, bond indices, commodity prices, and even specific sectors or industries. Some ETFs also use complex strategies such as leverage or shorting to amplify or inverse the returns of the underlying assets.
