What is an ETF?

Investopedia defines an exchange-traded fund as “a marketable security that tracks an index, a commodity, bonds or a basket of assets like an index fund.” Unlike mutual funds, an ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.

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