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Exchange-Traded Fund

(ETF) A fund that tracks an index, but can be traded like a stock. Many ETFs have options available allowing traders to profit from moves within a sector.

Additional Comments:

Similar to an index mutual fund, exchange-traded funds (ETFs) are designed to track different indexes, such as the Russell 2000 Index or the S&P 500 Index, or a particular industrial sector such as utility or biotechnology stocks. ETFs are different than index funds and sector funds because they are legally structured as stocks and are traded on stock exchanges just like any other stock and can be traded intraday and also sold short.

Related Terms:

Index Funds
An index fund is a fund that follows a passive investing strategy, meaning that the fund ...

Actively Managed Funds
In most actively managed funds, the fund manager makes specific investments with the goal of outperforming ...

A group of assets (often in a similar class of sector or market capitalization) which can ...

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