An exchange-traded fund, ETF for short, is an investment fund that lets you buy a large basket of individual stocks or government and corporate bonds in one purchase. Think of ETFs as investment wrappers, like a tortilla that holds together the component ingredients of a burrito, but instead of tomatoes and rice and lettuce and cheese, these burritos are filled with stocks or bonds and are considerably less delicious to eat with salsa.

ETFs provide many benefits. They are very liquid meaning you can have access to your money at any time of the day. They are cheap since the only manager only takes a small fee every year, usually of less than 5%. They are diversified, meaning that the risk is limited. And even more importantly, they usually perform better than other funds in the long run !

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