An Exchange-Traded Fund (ETF) is an investment fund designed to track the performance of an index, sector, commodity, or other assets such as stocks or bonds. Unlike traditional mutual funds, ETFs trade on a stock exchange throughout the day, just like individual stocks.

ETFs can be traded on the stock exchange throughout the day. In general, the costs of investing in ETFs are cheaper than investing in traditional investment funds. This largely has to do with the fact that ETFs are passively managed. This makes the management costs of an ETF much lower than traditional investment funds that are actively managed.

There are various types of ETFs designed to cater to different investment strategies and sectors. These include stock ETFs which replicate the performance of stock indices, bond ETFs focusing on fixed income securities, commodity ETFs for investing in physical goods or commodity futures, sector ETFs that target specific industries, international ETFs for exposure to foreign markets, and thematic ETFs which invest around a particular theme or trend.

A leveraged ETF is designed to amplify the daily performance of an underlying index or benchmark. By using financial derivatives and debt, these funds aim to deliver multiple times the daily or monthly return of their index, making them highly volatile and suited for short-term trading strategies rather than long-term investments due to the compounding effects over time.

Yes, ETFs can distribute dividends to investors if the underlying assets generate income. This income, whether from stock dividends or bond interest, is collected by the fund and passed on to shareholders. The frequency of these payments varies but is often quarterly for equity ETFs, aligning with the dividend payment schedules of the companies they hold.