Definition

An investment fund that trades on stock exchanges, offering diversification by tracking an index, commodity, or sector.

What to consider

  • Consider ETFs for broad market exposure with low fees.
  • Review the index or sector they track to ensure alignment with your goals.
  • Monitor their performance as part of your diversified portfolio.

Real world scenarios

  • To gain diversified exposure in one purchase, Nora invested in an ETF that tracked a broad market index, simplifying her investment strategy.

Related terms

Investments & Retirement