An ETF (Exchange-Traded Fund) is a fund traded on an exchange like stocks, comprising a portfolio of assets (stocks, bonds, commodities, indices, etc.) and allows investors to buy a share in this portfolio.
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The main advantage of an ETF is diversification since buying one ETF gives you access to a variety of assets, reducing risk. ETFs also have high liquidity, as they can be bought and sold during the trading day, like stocks.
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They often may have lower fees than traditional mutual funds and are suitable for both long- and short-term investments.