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Exchange Traded Fund (ETF)

An Exchange Traded Fund, or simply, ETF, pertains to a basket of securities that trade on an exchange much like a stock. In fact, within this basket of securities which includes bonds and cryptocurrencies, stocks may also be traded.

It is completely normal for ETF share prices to fluctuate constantly within a day of trading. This is completely different from mutual funds that are only traded once a day after the closing of the market. Apart from the assets already mentioned, ETFs may also contain U.S. only holdings with the others being international.

Rather than purchasing the stocks individually, ETFs offer low expense ratios and few broker commissions. One of the most popular examples of an ETF is the SPDR S&P 500 that keeps tracks of the S&P 500 Index.

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