An exchange-traded fund (ETF) is an investment fund that holds a collection of assets, such as stocks, bonds, or commodities, and trades on a stock exchange like a single share. They offer investors diversification, as a single ETF can provide exposure to a wide range of securities, mitigating the risk associated with investing in individual stocks. 

Key features of ETFs: 

• Diversification: They hold multiple assets, helping to spread risk.
• Trading: They can be bought and sold throughout the trading day at the current market price, offering more flexibility than mutual funds, which are only priced once daily after the market closes.
• Costs: Many ETFs have lower expense ratios compared to actively managed mutual funds, as they are often designed to passively track an index like the S&P 500.
• Tax Efficiency: ETFs are structured in a way that can help shareholders reduce annual taxes on their holdings. 

There are various types of ETFs, including those that track market indexes, specific industries, commodities, or international markets. 

1. ETFs allow investing in multiple stocks or bonds together, simplifying stock market access.
2. Unlike mutual funds, ETFs trade like stocks with fluctuating prices throughout the day.
3. Investors can start with the price of one ETF share, making it accessible without high minimums.