An ETF (Exchange-Traded Fund) is a type of pooled investment security that operates much like a mutual fund. It is a basket of securities that trades on an exchange just like a stock does. ETFs can contain all types of investments, including stocks, commodities, or bonds; some offer U.S.-only holdings, while others are international. ETFs are bought and sold like a company stock during the day when the stock exchanges are open. ETF share prices fluctuate all day as the ETF is bought and sold; this is different from mutual funds, which only trade once a day after the market closes. ETFs can contain multiple underlying assets, rather than only one like a stock does, making them a popular choice for diversification. ETFs let you access a diverse mix of asset classes, including domestic and international stocks, bonds, and commodities. ETFs often have lower fees than other types of funds, and they are traded more easily. ETFs are managed by experts and try to track an index, such as the S&P 500. ETF managers can use capital losses to offset capital gains within the fund, further reducing (or possibly eliminating) the taxable capital gains that get passed on to fund shareholders at the end of each year.