An exchange traded fund, more commonly referred to as an ETF, is a security designed to track a particular asset such as a commodity or sector that is traded on the stock exchange like a standard stock. ETFs can track a wide variety of assets ranging from a diverse and sizable amalgamation of securities to the price of a single commodity.

Some ETFS are even built to track different investment strategies. One of the most popular and commonly known ETFs are those that track the entire S&P 500 Index. These investment options have a particular price, allowing them to be purchased and sold rather easily. They’re often considered less volatile and safer than investing in individual stocks.