An ETF, exchange-traded fund, is an investment that’s built like a mutual fund—investing in potentially hundreds, sometimes thousands, of individual securities—but trades on an exchange throughout the day like a stock.

An ETF is similar to a mutual fund in that it offers investors a proportionate share in a pool of stocks, bonds, and other assets. It is most commonly structured as an open-end investment company, as are mutual funds, and is governed by the same regulations. Also, like a mutual fund, an ETF is required to post the marked-to-market net asset value of its portfolio at the end of each trading day.