Exchange-Traded Fund (ETF)

An investment fund that trades on a stock exchange just like an individual share, typically tracking an index, sector, commodity, or strategy. ETFs combine the diversification of a mutual fund with the real-time trading flexibility of a stock. Since the launch of the first U.S. ETF -- the SPDR S&P 500 (SPY) -- in 1993, the industry has grown to thousands of funds covering everything from the Nasdaq 100 to Bitcoin futures.