What is an ETF?

Justin Ling Updated by Justin Ling

ETFs [def'n]: Short for "Exchange Traded Fund", an ETF is a single investment that contains many other investments (sometimes thousands).

Top Investment Management companies build ETF products by combining existing investment into a single basket investment. They list this on major exchanges so they are accessible to all investors.

Developed in the 1990s, ETFs are a relatively new financial instrument that was designed to give those with a small number of funds to be able to achieve diversified portfolios that were only once accessible to the wealthy.

Today ETFs are used by all types of investors from amateur to professional, providing a liquid and easy way to trade a large assortment of investments at once.

Here's a short video that can help you better understand ETFs. It was part of a pet project I started 4 years ago called Investipe.

How did we do?

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