Exchange Traded Funds are a group of different securities such as stocks, bonds and commodities that are bundled together in one investment. Like stocks they can be purchased through a self-directed account or a broker and trade on an exchange like the Toronto Stock Exchange or New York Stock Exchange. To purchase stocks and ETFs generally there will be commissions involved depending on the method of purchase. There are some differences between the two securities. ETFs are constructed by asset managers and therefore do charge a management fee. Management fees can start as low as 0.02% but ultimately depend on the type of ETF. Additionally because ETFs contain a group of investments, diversification is achieved more easily than building the same portfolio of stocks.