The simplest and easiest way to understand , define and describe an ETF, (Exchange Traded Fund), is to visualize it as a basket of stocks sold as a single stock. An ETF can be designed to track and mirror the performance of just about anything and then sold as a single unit for a single price.

Suppose you are new to investing and you are in investing in Technology stocks. Your choices are limitless as you could could shares of many individual company stocks. A better approach may be to consider buying an ETF that mirrors the Tech sector and sell them as a single unit.

Going back to our previous example, suppose you have $1000 to start your investment journey. You will realize that your $1000 may not be enough to buy more than a single stock of Microsoft, Nvidia and Google. This where an ETF comes in. You could buy an ETF that contains these Three companies and more.

Key Takes:

1. An ETF is more or less, a basket of stocks or anything that is sold as a single unit.

2 ETFs are designed to track and mirror whatever they are made up of. An example could be an ETF that is designed to track Microsoft, Google and Nvidia. The performance of the ETF will depend on how well or poorly these same companies are doing.

3. The advantage of an ETF over a single stock is that, it allows investors to spread their risks over many companies. 

4. ETF’s are excellent choices for new investors who don’t want to pick individual stocks