Exchange Traded Fund (ETF)

An exchange traded fund, more commonly known as an ETF, is a bucket of compiled securities that trade on the open market. Like mutual funds, exchange traded funds are controlled by a portfolio manager. The benefit of an exchange traded fund are that they trade intraday, similar to a stock. Investors can get in or out of an exchange traded fund during market hours rather than having to wait for the new net asset value.

Additionally, since exchange traded funds trade with a "price", they can trade at a discount or premium to NAV in times of abnormal supply and demand. Exchange traded funds also allow for investors to directly invest into large market tracking indices like the S&P 500, Dow Jones Industrial Average, or Nasdaq Composite among others.