Exchange-traded funds (ETFs) are investment vehicles that track a particular index, such as the S&P 500, or a specific group of assets, such as a basket of technology stocks. ETFs are similar to mutual funds, in that they provide investors with access to a diversified portfolio of investments, but they are traded on stock exchanges like individual stocks.
One of the main benefits of ETFs is that they offer investors the convenience and diversification of mutual funds, while also providing the ability to trade throughout the day like individual stocks. This can be beneficial for investors who want the flexibility to buy and sell their investments quickly and easily.
Another benefit of ETFs is that they often have lower costs than mutual funds. Because ETFs are traded on stock exchanges, they are not subject to the same regulatory requirements as mutual funds, and as a result, they often have lower fees and expenses.
Overall, ETFs are investment vehicles that track a particular index or group of assets, and provide investors with the convenience and diversification of mutual funds, combined with the ability to trade throughout the day like individual stocks. By investing in ETFs, investors can potentially gain access to a wide range of investments at a lower cost than mutual funds.