ETF (Exchange-Traded Fund)
A basket of investments — stocks, bonds, or both — that trades on an exchange like a single stock. Most ETFs are index funds you can buy and sell any time the market is open.
By Findley's Finance · Last reviewed: September 2026
Why it matters
ETFs combined the two best ideas in retail investing: the diversification and low fees of index funds with the flexibility of stocks. You can buy one share, trade it midday, and pay no minimum — advantages mutual funds cannot match. The structure is also slightly more tax-efficient than mutual funds. For most people, a broad-market ETF is the entire portfolio.