Exchange Trade Fund

An exchange traded fund is a basket of securities that trades on an exchange just like a stock does.

It is a type of fund that holds multiple underlying assets rather than only one like a stock does. Because there are multiple assets within an ETF, they can be a popular choice for diversification. ETF can thus contain many types of investment, including stocks, commodities, bonds or a mixture of investment types.

ETFs have several advantages over traditional open-end funds. The 4 most prominent advantages are trading flexibility, portfolio diversification and risk management, lower costs, and tax benefits.

Trading flexibility

Portfolio diversification and risk management

Lower costs

Tax benefits

Written by - Aman Singh | LinkedIn