Exchange-Traded Funds (ETFs) are investment funds that trade on stock exchanges, similar to individual stocks. They hold a collection of assets such as stocks, bonds, or commodities, providing investors with a simple way to diversify their portfolios.

One of the main advantages of ETFs is their low cost. Since many ETFs track a specific index, they often have lower fees than actively managed mutual funds. This makes them an attractive option for investors looking to minimize expenses.

ETFs also offer liquidity and flexibility. Unlike mutual funds, which can only be traded at the end of the day, ETFs can be bought and sold throughout the trading day at market prices. This allows investors to react quickly to market conditions.

Incorporating ETFs into your portfolio can help you achieve broad market exposure, reduce risk, and lower costs, making them an excellent choice for both beginner and experienced investors.