Exchange-Traded Fund (ETF)

An Exchange-Traded Fund (ETF) is an investment fund that holds a diversified mix of assets (stocks, bonds, commodities) and trades on an exchange like a stock. ETFs allow investors to gain exposure to a sector, index, or asset class without buying individual stocks.

Key Benefits of ETFs:

Diversification: A single ETF can hold hundreds of stocks or bonds.

Liquidity: ETFs can be bought or sold at any time during market hours, unlike mutual funds.

Lower fees: ETFs often have lower expense ratios compared to mutual funds.

Passive or active management: Many ETFs track an index (S&P 500 ETFs), while others are actively managed.

Popular ETFs include SPY (S&P 500 ETF), QQQ (Nasdaq 100 ETF), and VTI (Total Stock Market ETF). ETFs can be good choices of investment for both beginner and experienced investors looking for cost-effective diversification.