An exchange-traded fund (ETF) is a pooled investment security that functions in a manner similar to a mutual fund. Generally, ETFs mirror the performance of a specific index, sector, commodity, or other assets. However, unlike mutual funds, ETFs can be bought or sold on a stock exchange just like regular stocks. An ETF can be designed to follow various things, ranging from the value of an individual commodity to a broad and varied assortment of securities. ETFs can also be structured to replicate particular investment approaches.