What is an ETF?

Simple explanation

An ETF (Exchange-Traded Fund) is a basket holding many companies in one share. Buy one ETF, own a tiny slice of all of them.

Picture this

A shopping basket with hundreds of mini-companies inside — bought in one move, with one click.

— Cash

Real example

A world ETF like 'MSCI World' holds shares in ~1,500 companies across 23 countries. €10 in this ETF buys you a tiny piece of every one of them.

Common mistake

Treating an ETF like a single stock. ETFs are bundles — that's their superpower. Less concentration, less risk.

Quick check

Takeaway

ETFs are the beginner's swiss army knife: simple, diversified, cheap.

Related glossary terms