An exchange-traded fund, better known as ETF, is a fund that can be traded on an exchange like a stock. They are a basket of shares of the largest companies. The main feature of such funds is that each of them is traded on the principle of ordinary shares, but at the same time, it contains many securities of large companies.
ETFs give you a way to buy and sell a basket of assets without having to buy all the components individually. They work like this: the fund provider owns the underlying assets, designs a fund to track their performance, and sells shares in that fund to investors.
For an investor, this is a guaranteed opportunity to get a stable passive income. Even if one company's shares start falling, the overall index will not show a noticeable decrease, leading to increased investment reliability. The risks are minimal, and you can get passive profit from dividends and resale.
2020-09-24 • Updated