Exchange-Traded Fund [ETF] Law and Legal Definition

Exchange-traded fund is a mutual fund that trades like a stock. Like an index fund, an ETF represents a basket of stocks that reflect an index such as the S&P 500. ETFs are listed for trade on a stock exchange and are priced throughout the day at market value based on the NAVs/prices of the underlying funds. Examples of ETFs include iShares, offered by Barclay Financial Corporation, which represent over 70 different index funds that trade like stocks; DIAMONDs, offered by Diamonds Trust Series I, that tracks the Dow Jones Industrial Average, and QUBEs (QQQs), which represent the Nasdaq-100.