Glossary
ETF (Exchange-Traded Fund)
Investing
An ETF is a pooled investment fund that holds a basket of assets and trades on an exchange like a single share.
Most ETFs track an index — the S&P 500, a bond aggregate, or a commodity such as gold — and publish holdings daily. Authorised participants create and redeem shares in blocks, which keeps the market price close to the fund's net asset value.
The key comparison metrics are the expense ratio, tracking difference against the index, average bid-ask spread, fund size and whether the fund is physically backed or synthetic.