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ETF
Last reviewed 2026-05-12 · Educational content only — no partner offers on this page.
1
Explain it like I’m new
An Exchange-Traded Fund — like a mutual fund, but it trades on a stock exchange throughout the day.
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Technical version
A pooled investment vehicle whose shares are listed and traded on a securities exchange, typically tracking an index or sector.
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Why people get confused
- ✕‘All ETFs are passive.’ Some are actively managed and pricey.
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What decision this affects
Why it matters
ETFs are often more tax-efficient and have lower minimums than mutual funds.
- →Check the expense ratio.
- →Avoid leveraged or inverse ETFs unless you fully understand them.
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Related next concepts
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Trusted sources
Educational — no commercial relationship.
Questions people ask
- ETF vs mutual fund?
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