Exchange traded fund (ETF)

Exchange traded fund (ETF) – A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. An ETF experiences price changes throughout the day as it is bought and sold, just like a stock. For this reason, it does not have its asset-value-nav/" data-gt-translate-attributes='[{"attribute":"data-cmtooltip", "format":"html"}]' tabindex='0' role='link'>net asset value (NAV) calculated every day like a mutual fund. ETFs provide the diversification of an index fund, as well as the ability to sell short, buy on margin, and purchase as little as one share. Their expense ratios are lower than those of the average mutual fund, and brokers’ commissions (fees) for buying and selling ETFs are similar to the commissions investors pay for buying and selling stocks.