Which of the following is a characteristic of ETFs?

The characteristic that ETFs, or Exchange-Traded Funds, trade on exchanges like stocks is key to understanding their nature and functionality. ETFs are investment funds that hold a diverse portfolio of assets and are designed to track specific indexes, sectors, or commodities. The fact that they can be bought and sold on stock exchanges during trading hours allows investors to take advantage of price fluctuations throughout the day, similar to individual stocks.

This trading feature distinguishes ETFs from traditional mutual funds, which are usually only bought or sold at the end of the trading day at a set net asset value (NAV). Because of their exchange-traded nature, ETFs provide liquidity and flexibility for investors, making them a popular investment choice.

The other options highlight features that do not apply to ETFs, such as being redeemable by the issuer (which is a characteristic of mutual funds), investing solely in bonds (ETFs can invest in various asset classes, including stocks, bonds, and commodities), and having a stated termination date (which is more typical of closed-end funds). The broad investment strategy and trading methodology of ETFs are key reasons for their growth and adoption in investment portfolios.