An ETF (Exchange-Traded Fund) is a 'basket' of securities (for example bonds, stocks, and real estate) bundled into a fund. This allows investors to easily diversify their portfolios.
ETFs are traded like stocks on stock exchanges and often times track an index such as the Dow Jones or S&P 500. Rather than buying many individual stocks, bonds, real estate, etc., one can use an ETF to create the same level of diversity, at a fraction of the price.
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