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A type of investment fund that trades on stock exchanges, holding assets such as stocks, bonds, or commodities.
ETFs combine the diversification benefits of mutual funds with the trading flexibility of stocks. They can be bought and sold throughout the trading day at market prices. Most ETFs track an index (like the S&P 500) and have lower expense ratios than mutual funds, often below 0.10%. Popular ETFs include SPY (S&P 500), QQQ (Nasdaq 100), and IWM (Russell 2000). Thematic ETFs covering sectors, countries, and strategies have proliferated, with over 3,000 ETFs available in the U.S. alone.