A fund that pools money from many investors to buy a basket of holdings, such as stocks or bonds, similar to a Mutual fund. The key difference is that an ETF trades on an Exchange throughout the trading day at a price that moves continuously, like an individual Stock, rather than being priced and traded once per day after markets close. ETFs are often built to track an Index and, on average, tend to carry lower fees than actively managed mutual funds, though this varies fund by fund. Buying an ETF is a common way for investors to get instant Diversification across many holdings in a single purchase.
