ETF

Business & Finance abbreviation · Stock Market & Investing

ETF
Stands forExchange-traded fund
CategoriesBusiness & Finance

ETF stands for Exchange-traded fund, a stock market & investing abbreviation.

Investment fund that holds a basket of assets, such as stocks, bonds or commodities, and trades on a stock exchange throughout the day like a single share. Most ETFs track an index at low cost, making them a popular alternative to mutual funds.

Example: She invests $500 a month in a total-market ETF with an expense ratio of 0.03 percent.

Usage notes

The first US ETF, the SPDR S&P 500 ETF Trust (SPY), launched in 1993 and remains one of the most traded securities in the world. In the US, ETFs are generally more tax-efficient than mutual funds because of in-kind creations and redemptions by authorized participants. Global ETF assets passed $10 trillion in 2021. Leveraged and inverse ETFs are designed for short-term trading and can behave unexpectedly over longer periods.

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