What is an Exchange Traded Fund (ETF)?

What is an Exchange Traded Fund (ETF)?

An exchange-traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other assets, but which can be purchased or sold on a stock exchange the same as a regular stock.

ETF share prices fluctuate all day as the ETF is bought and sold; this is different from mutual funds that only trade once a day after the market closes. ETFs offer low expense ratios than buying the stocks individually.

An ETF (Exchange-traded fund) is a basket of securities that tracks an underlying index. For example, a Nifty 50 ETF tracks the composition of the Nifty 50 Index. When you buy a Nifty ETF, you are getting exposure to the 50 stocks that form the Index.

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