ETF Education: What Is An ETF?

Group 1 - ETFs provide low-cost access to a wide range of market segments, enabling investors to build diversified portfolios with lower costs and enhanced transparency [1] - ETFs are essentially mutual funds that offer pooled investment vehicles for diversified exposure to various asset classes, including stocks, bonds, commodities, and currencies [5][6] - Unlike traditional mutual funds, ETFs are traded on exchanges, allowing investors to buy and sell shares throughout the trading day, providing greater flexibility [7][8] Group 2 - Traditional mutual funds have been around for nearly 100 years, providing exposure to various assets, but they only allow transactions once per day [4][8] - Investors in mutual funds receive shares that represent their stake in the total investment, with daily valuations to determine share worth [2][3]