Business and Personal Finance Dictionary

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• EXCHANGE-TRADED FUND
  
  Exchange-traded or closed-end funds behave like mutual funds in some ways and like stocks in others. Like other mutual funds, exchange-traded funds buy and sell individual investments in keeping with their investment objectives. But the funds resemble stocks in the way they are traded, since they raise money by selling a fixed number of shares when the fund is first issued. Then the shares trade in the secondary market, either on a stock exchange or in an electronic market. The market price of shares of a closed-end fund fluctuates not only according to the value of its underlying investments but also in response to investor demand.
  
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