An exchange-traded fund (or ETF) is a fund that owns a basket of  financial instruments (e.g., stocks or commodities) that reflect the composition of a market index (e.g., the Dow Jones Industrial Average). Somebody looking to buy ETF shares would do so the same way he or she would buy stocks, that is, on a stock exchange, with the help of a broker who charges a nominal fee.

Tags: etf, exchange-traded fund, mutual funds, stock indices, stocks