Exchange Traded Funds (ETFs) have become an integral part of modern stock market portfolios. These investment vehicles offer investors diversification, liquidity, and cost efficiency.ETFs are typically passively managed funds that track a specific index, sector, commodity, or asset class. They are traded on stock exchanges, making them easily accessible to individual investors.ETFs provide diversification by holding a basket of securities within a single fund. This helps reduce the risk associated with investing in individual stocks.ETFs also offer liquidity, as they can be bought and sold throughout the trading day at market prices. This makes them a flexible investment option for investors looking to adjust their portfolios quickly.Cost efficiency is another advantage of ETFs. Because they are passively managed, ETFs typically have lower expense ratios compared to actively managed mutual funds. This can lead to higher returns for investors over the long term.In conclusion, ETFs play a crucial role in stock market portfolios by providing diversification, liquidity, and cost efficiency. Investors can benefit from including ETFs in their investment strategy to help achieve their financial goals.