What is ETF?
An ETF (Exchange-Traded Fund) is an investment fund that holds a basket of assets and trades on a stock exchange like a single share, offering low-cost diversification.
Example
Buying one share of an S&P 500 ETF gives you a slice of 500 large U.S. companies in a single, easily traded investment.
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Related terms
Mutual Fund
A mutual fund pools money from many investors to buy a professionally managed portfolio of stocks, bonds, or other assets. Investors own units proportional to their contribution.
Diversification
Diversification is the practice of spreading investments across different assets, sectors, or regions to reduce the impact of any single investment performing poorly.