exchange-traded fund /ɪksˌtʃeɪndʒ ˈtɹeɪdɪd ˈfʌnd/ noun1 •An investment fund traded on stock exchanges, much like stocks.The first exchange-traded fund was launched in the early 1990s to track the S&P 500.Many retail investors prefer an exchange-traded fund over a mutual fund due to the intraday liquidity. formsexchange-traded funds