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An ETF (exchange traded fund) is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. An ETF trades like a common stock on a stock exchange. ETFs experience price changes throughout the day as they are bought and sold. ETFs could be useful instruments since they have higher daily liquidity and are tax efficient, easily traded and have low transaction costs. ETFs also could be underlying by more than one financial instrument and this gives the opportunity to investors to invest their money in a diversified fund making them an attractive alternative for individual investors.