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Investing & the Stock Market vocabulary · Funds & ETFs

ETF

Meaning in investing & the stock market, with examples

/ˌiː tiː ˈef/abbreviationCore term

In investing & the stock market, ETF means: Short for exchange-traded fund: a fund that holds a basket of assets, often following an index, and whose units are bought and sold on a stock exchange like shares.

In Turkish: borsa yatırım fonu, BYF

How it is used

Said letter by letter: E-T-F. Investors buy an ETF through a brokerage account during trading hours. People talk about gold ETFs, bond ETFs, sector ETFs and low-cost ETFs, and compare them by expense ratio and tracking error.

Example sentences

  1. Instead of picking individual stocks, he buys a global equity ETF every month.

  2. Gold ETFs saw strong inflows as investors looked for safety.

Common collocations

  • buy an ETF
  • gold ETF
  • bond ETF
  • ETF inflows
  • low-cost ETF
  • mutual fundA fund that collects money from many investors and uses it to buy a mix of shares, bonds or other assets, managed by professionals and priced once a day.
  • index fundA fund that aims to match the performance of a market index by holding the same securities in the same proportions, instead of trying to beat it.
  • expense ratioThe yearly cost of running a fund, shown as a percentage of the money invested in it. It is taken from the fund's assets, so it reduces investors' returns.
  • passive investingA strategy of buying funds that follow a market index and holding them for a long time, rather than choosing individual stocks or timing the market.
  • net asset valueThe value of a fund's assets minus its liabilities, usually divided by the number of units to give the price of one unit of the fund.

More terms: Funds & ETFs

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This page explains English vocabulary for learners. It is not financial advice.