An ETF is a fund that will track an index but trades like a common stock. By owning an ETF, investors get the diversification of buying an entire index at a more affordable cost. ETFs are one of the most popular ‘passive investments’ which have over the last few years been competing with more traditional ‘active investments’ like mutual funds and hedge funds. ETFs typically have lower fees than mutual funds and can easily be bought and sold during trading hours.
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