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What is an ETF (Exchange-Traded Fund)?

What's an ETF? What's an ETF? An ETF (exchange-traded fund) is an investment that's built like a mutual fund—investing in potentially hundreds, sometimes thousands, of individual securities—but trades on an exchange throughout the day like a stock.

How are ETFs different from mutual funds?

An exchange-traded fund, or ETF, allows investors to buy many stocks or bonds at once. One common question is how ETFs differ from mutual funds since the basic principle is the same. The key difference between these two types of investment vehicles is how you buy and sell them.

How do I buy and sell ETFs online?

Step 1: Open a brokerage account. You’ll need a brokerage account before you can buy or sell ETFs. The majority of online brokers now offer commission-free stock and ETF trades, so cost isn’t a major consideration. The best course of action is to compare each broker’s features and platform.

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