Exchange-traded funds (ETFs) are investment funds that are traded on stock exchanges, just like stocks. They are popular among investors due to their low fees, easy tradability, and diversification benefits.

ETFs are designed to track the performance of a specific index, such as the S&P 500 or NASDAQ. This means that investors can buy shares in an ETF that will provide them with exposure to a selection of stocks or other assets included in that index. For example, an ETF that tracks the S&P 500 will hold shares in all 500 companies included in that index.

One of the main advantages of ETFs is their low expense ratios, which are generally much lower than those of mutual funds. This is because ETFs are designed to passively track an index, whereas actively managed mutual funds require more research and analysis, which adds to their costs.

Another advantage of ETFs is their tradability. Unlike mutual funds, which are generally bought and sold only at the end of the trading day, ETFs can be bought and sold throughout the day, just like stocks. This means that investors can react quickly to changes in the market and adjust their portfolios accordingly.

ETFs also provide diversification benefits, as they allow investors to easily gain exposure to a wide range of assets. For example, an ETF that tracks the global bond market will hold a diversified portfolio of bonds from around the world, providing investors with exposure to a range of different countries and currencies.

Overall, ETFs are a popular investment vehicle for many investors due to their low fees, easy tradability, and diversification benefits. They offer a simple way for investors to gain exposure to a wide range of assets and to react quickly to changes in the market. As such, they are likely to remain a popular investment choice for many years to come.