◈ GLOSSARY · INVESTING
ETF (Exchange-Traded Fund).
A definition, in plain English — with the books that teach it.
ClearValue Books · reviewed against sources ·
◈ DEFINITION
What it means
Definition
An ETF is a basket of securities that trades on a stock exchange like a single stock. You can buy or sell it any time the market is open, at a live price. Most ETFs are index funds in ETF wrapper form, which means low expense ratios and good tax efficiency compared to traditional mutual funds.
◈ IN PRACTICE
Example
VTI holds roughly the entire U.S. stock market — about 3,700 companies — at a 0.03% expense ratio. You can buy one share at, say, $250 in your brokerage account just like you'd buy a single stock, and you instantly own a slice of every public U.S. company.
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