An ETF, or exchange traded fund, is a type of investment fund that trades on a stock exchange. ETFs are similar to mutual funds in that they hold a basket of securities, but they are traded like stocks. ETFs are popular because they offer the potential for higher returns than traditional investments, and they are also very liquid.
ETFs typically track an index, such as the S&P 500, or a sector of the economy, such as energy or healthcare. When you invest in an ETF, you are essentially investing in all the companies in that index or sector. For example, if you invest in an ETF that tracks the S&P 500, you will have exposure to 500 different companies.
ETFs have become very popular in recent years, as investors have been increasingly looking for ways to diversify their portfolios and get exposure to a variety of different assets. ETFs offer a convenient and cost-effective way to do this.