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HomeRight Arrow TerminologyRight Arrow Exchange-traded funds (ETFs)

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Exchange-traded funds (ETFs)

An exchange-traded fund (ETF) seeks to track a whole index, sector, market or commodity and can be traded on an exchange much like a regular stock. ETFs operate like a mutual fund, representing a basket of assets that are pooled together by a professional fund manager.

The appeal of ETFs is the diversification it offers. With the purchase of a single ETF, a trader can get exposure to a basket of securities without having to do the research to individually pick securities to add to their portfolio. There are various types of ETFs available, including equity ETFs, bond ETFs and more.

Read more about ETFs here.

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