An exchange-traded fund (ETF) is an investment vehicle that tracks specific asset classes or indices, offering a simplified investment method for individuals. ETF fund flows represent the net inflows and outflows of money in ETFs, serving as indicators of investor sentiment rather than direct performance metrics. Understanding ETF flows can help investors gauge public sentiment and make informed trading decisions. For example, significant inflows suggest bullish sentiment, while outflows indicate bearish sentiment. Analyzing these flows alongside market trends and news can provide insights into investor behavior. Both active and passive ETFs play distinct roles, with active ETFs seeking to outperform the market and passive ETFs mirroring indices. Investors can use ETF flows to inform their trading strategies, either by comparing flows across sectors or keeping abreast of market news that impacts ETF transactions.

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