ETFs are a diversified basket of securities aimed to track a specific index or sector.
An ETF is an exchange-traded fund which owns underlying assets such as equities or fixed income and divides them into individual shares. ETFs are similar to Mutual Funds but they trade throughout the day on exchanges. An ETF's main objective are to match the performance of a specific market index, asset class, or sector. This financial instrument gives you broad exposure to a number of underlying assets. Due to the passive management of these investment products they have lower expense ratios and tax advantages when compared to actively managed mutual funds.