ETF (Exchange-Traded Fund)
A fund holding many assets that trades like a single stock.
ETFs let investors buy a whole basket, such as an index or a sector, in one trade, usually at low cost.
An ETF is a fund that holds a basket of assets, a whole index, a sector, a commodity, but trades on an exchange like a single stock. Buy one share and you own a sliver of everything inside it. That gives you instant diversification in a single ticket, usually at a low annual fee.
The appeal is simplicity and cost. Instead of buying 500 stocks to match an index, you buy one ETF that does it for you and trades all day at a live price. There are ETFs for almost anything now, from broad markets to narrow themes and leveraged bets. The narrower and more exotic the ETF, the more you need to read how it actually works before trading it.