ETFs
Overview
An exchange-traded fund, or ETF, is a type of investment fund that can be bought and sold on a stock exchange.
While there are different varieties of ETFs, they all allow investors to invest in a “basket” of different assets. Depending on the type, the basket may contain securities like stocks, commodities like gold and silver, or another class of assets.
Exchange-traded funds are popular investment vehicles for both retail investors and institutional investors. As of 2024, there were over 3,000 listed in the US, and the global ETF market was worth more than $10T.
These funds make it easier for the average person to diversify their portfolio while lowering risk in comparison to investing in an individual security. As of last year, more than 45% of retail investors chose to invest in ETFs due to these and other perks, such as their tax advantages.
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