What is an ETF?

An ETF (Exchange-Traded Fund) is a basket of securities — stocks, bonds, or other assets — that trades on a stock exchange like an individual stock. Most popular ETFs track indexes (like VTI for the total U.S. market or SPY for the S&P 500). ETFs offer instant diversification, low costs, and can be bought and sold any time the market is open. They are the primary tool of most modern passive investors.