In simple terms an Exchange Traded Fund (ETF) is like a mutual fund, the only difference is that ETF can be traded on the stock market. An ETF is a fund which invests in an index, commodity, sector, theme or an asset. The value of these is based on the underlying asset that the it is invested in.
Market capitalization or market cap refers to the size of the company, which is calculated based on the market price of the company’s shares and the number of its outstanding shares. In other words, its the market value of a company that is determined by the stock market.
When it comes to investing, you have probably heard the age old adage, “don’t put all your eggs in one basket.” You probably are tired of listening this many times. But it actually is very important when it comes to protecting your wealth and assets from unncessary risk.