JoymistaWhat Is an ETF (Exchange-Traded Fund)?
An ETF is a basket of assets, such as all the stocks in an index, that is bought and sold on an exchange like a single share.
Explained
An ETF gives broad diversification in one trade, often at a low yearly cost called the expense ratio. There are ETFs for indices, sectors, bonds and commodities, and some are leveraged, which need special care since they usually do not suit long holding.
Example
Example with made-up numbers10,000 dollars in a fund with a 0.2% yearly expense ratio costs about 10,000 × 0.002 = 20 dollars a year.
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Open in JoymistaEducational content, not investment advice.