An ETF, or exchange-traded fund, is a type of investment fund that holds multiple underlying assets, rather than only one like a stock does. ETFs are a popular choice for diversification because they can contain many types of investments, including stocks, commodities, bonds, or a mixture of investment types. ETFs are traded on exchanges, just like stocks, and their share prices fluctuate all day as the ETF is bought and sold. ETFs can be a cost-effective way to gain exposure to a broad basket of securities with a limited budget, and they offer built-in diversification. ETFs can be bought and sold throughout the day on an exchange, and investors can even earn dividends depending on the type of index the fund tracks. ETFs are not mutual funds, but they combine features of a mutual fund with the ability to trade throughout the day on a national securities exchange at market prices. ETFs can be a good way to get started investing because they offer built-in diversification and dont require large amounts of capital to invest in a range of stocks.