What are Exchange-Traded Funds (ETFs)?

An Exchange-Traded Fund (ETF) is an investment fund traded on stock exchanges. ETFs are an option for investors seeking portfolio diversification because some ETFs allow you to have exposure to a variety of assets (including stocks, commodities and bonds) with the ease of trading a single security.


For example, instead of buying a large number of individual US technology stocks, you can invest in the US technology sector with a single ETF.

Some ETFs track an underlying index, such as the S&P 500, although others can invest in any number of industry sectors or use various strategies. There are all kinds of ETFs with all kinds of investment approaches. Below are four heavily traded ETFs as reported by Yahoo Finance:

  • SPDR S&P 500 (SPY): The oldest surviving and most widely known ETF tracks the S&P 500 Index  
  • iShares Russell 2000 (IWM): Tracks the Russell 2000 small-cap index
  • Invesco QQQ (QQQ): Indexes the Nasdaq 100, which typically contains technology stocks
  • iShares MSCI Emerging Markets ETF EEM: This fund targets emerging markets and follows the MSCI Emerging Markets Index. 

How to Invest in ETFs with Passfolio

With Passfolio, you can start investing in ETFs with as little as $1 - all with no commission fees¹². We make investing in US assets accessible and even accept local deposit methods such as TEDs. 

Sign up to Passfolio today! Find out more at

¹ Please see our fractional shares disclosure.

² Securities less than $5 cost $0.02/share. Please see our disclosures on other charges.

Please read important legal disclosures that apply to your relationship with Passfolio.

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