What are ETFs?

ETF stands for exchange-traded fund. An ETF is a collection of investments that trades as a single security, and they commonly offer a simplified, low-cost way to invest in a diversified portfolio of stocks and/or bonds. They are similar to mutual funds, but whereas mutual funds can only be bought and sold at the end of the day for one price, ETFs trade continuously throughout the day and investors can buy or sell them at prevailing market prices. ETFs are generally also lower cost and provide greater tax benefits then mutual funds.