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BeginnerBasics

What is an ETF?

An ETF (Exchange-Traded Fund) trades on exchanges like a stock but holds a basket of assets. It's one of the best tools for diversified, low-cost market exposure.

By Jim Liu · Published February 2026

TL;DR

An ETF (Exchange-Traded Fund) trades on exchanges like a stock but holds a basket of assets. It's one of the best tools for diversified, low-cost market exposure.

How ETFs Work

An ETF is an investment fund listed on an exchange, tradeable like a stock during market hours. Unlike mutual funds that price once daily at NAV, ETFs have real-time prices. Most ETFs track an index (e.g., S&P 500, Hang Seng Index) by holding the same securities.

Key Terms:

ETFNAVindex
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