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What is an ETF (Exchange-Traded Fund)?

What's an ETF? What's an ETF? An ETF (exchange-traded fund) is an investment that's built like a mutual fund—investing in potentially hundreds, sometimes thousands, of individual securities—but trades on an exchange throughout the day like a stock.

Are exchange traded funds mutual funds?

Exchange traded funds may trade like stocks, but under the hood they more resemble mutual funds, which can vary greatly in terms of their underlying assets and investment goals. Below are a few common types of ETFs — just note that these categories aren’t mutually exclusive. For example, a stock ETF might also be index-based, and vice versa.

What is an ETF & how does it work?

WHAT IS AN ETF? Exchange-traded-funds, or ETFs, are similar to mutual funds in that they invest in a basket of securities, such as stocks, bonds, or other asset classes. But unlike mutual funds and similar to a stock, ETFs can be traded whenever the markets are open.

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