An ETF, or exchange-traded fund, is a type of investment fund that is traded on stock exchanges. ETFs own financial assets such as stocks, bonds, currencies, futures contracts, and/or commodities such as gold bars. ETFs are bought and sold like a common stock on a stock exchange, and their share prices fluctuate throughout the day as the ETF is bought and sold. ETFs can contain all types of investments, including stocks, commodities, or bonds. Most ETFs try to track an index, such as the S&P 500, and only buy and sell stocks when its benchmark index does. ETFs provide an opportunity to diversify holdings, enjoy lower investment minimums, and potentially lower risk exposure compared to owning just a handful of individual stocks or bonds. ETFs are a popular choice for diversification because they hold multiple underlying assets, rather than only one like a stock does.