ETF refers to exchange-traded fund, which is a marketable security that tracks different types of index, commodity, bonds or multiple assets like an index fund. An ETF is a type of fund that has ownership of assets (bonds, gold bars, shares of stock, etc.) and divides ownership of those assets into shares. 

For example, the Vanguard Total Stock Market ETF (VTI) tracks the performance of United States (US) Total Market Index. This includes companies such as Apple, Microsoft, Amazon and Google. VTI which owns the stock shares of these companies divides the ownership of these assets into ETF-shares. By owning VTI-ETF, investors get the diversification of an index fund – essentially owning shares of these companies.

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