ETF (exchange-traded fund)
Also called: exchange-traded fund, ETFs
An ETF is a fund that holds a basket of investments, such as all the stocks in an index, and trades on an exchange like a single stock. One purchase gives you a slice of everything inside it.
ETFs are the most common way to diversify cheaply. Most track an index like the S&P 500 and charge a small yearly fee called the expense ratio.
Unlike a mutual fund, which is priced once a day, an ETF's price changes throughout the trading day.
In Journey Shares
Game ETFs hold whole groups of people (by category, country or political view), weighted by market cap and starting at $10. →
Related terms
- Index fund: An index fund is a fund that buys every stock in a market index, such as the S&P 500, in the same proportions, so it matches the market's return instead of trying to beat it.
- Mutual fund: A mutual fund pools money from many investors to buy a portfolio chosen by a manager.
- Expense ratio: The expense ratio is the yearly fee a fund charges, as a percentage of the money you have in it.
- Diversification: Diversification is spreading money across many different investments so a loss on one has less effect on the whole portfolio.
- Market index: A market index is a number that tracks the combined price of a set group of stocks, such as the S&P 500 (500 large US companies), to show how that part of the market is doing.
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