Glossary
ETF: definition
An exchange-traded fund holds assets, or contracts on assets, and lists its own shares so that investors can buy and sell them during market hours. The listing does not change the risk of the assets.
In practice
Most equity ETFs are open-ended funds. Their price stays near asset value because dealers can create and redeem shares. That mechanism can strain when the underlying market is closed. The ongoing charge, the tracking method, securities lending and the fund’s domicile are the document facts that matter. A thematic ETF with twenty similar stocks is a concentrated bet that happens to trade like a share.
A worked example
Two ETFs can track “global equities” with different country weights, different withholding-tax outcomes and different securities-lending policies. The names will not show it. The factsheets will.
Related
Sources and review
Last reviewed: 2026-10-13. Next review due 2027-04-13. Status: editorial review of this page, not a live verification of every third-party fee.
Author: WiT Markets Editorial, Editorial desk. The WiT Markets editorial desk writes explanatory pages, comparison context and research notes. It separates sourced facts from items that are not confirmed, and it does not provide personal recommendations.
Reviewed by: WiT Markets Research Review.
Primary and regulatory sources
- U.S. Securities and Exchange Commission — checked 2026-10-13
- Investor.gov — checked 2026-10-13