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ETF (Exchange-Traded Fund)

A fund that holds a basket of assets and trades on an exchange like a stock.

ETFs & PortfolioBeginner

Definition

ETFs let you buy broad exposure, such as the S&P 500 or a sector, in one trade. Prices change throughout the day, and expense ratios are typically low for index ETFs. Not all ETFs are plain index trackers: some are leveraged, inverse or actively managed.

Watch out for

Read what an ETF actually holds and how it is built. Thinly traded ETFs can have wide spreads.

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