Market Capitalization Definition
Learn the definition of market capitalization and other ETF terminology from the etf.com glossary.
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Learn more about Market Capitalization
Market Capitalization, a pivotal concept in ETFs, encapsulates the aggregate market value of a fund's outstanding shares. Calculated by multiplying the number of shares by the current market price per share, it determines the size and scale of an ETF within the broader financial landscape. ETFs are often categorized based on market capitalization, with distinctions between large-cap, mid-cap, and small-cap funds. Market capitalization serves as a fundamental metric guiding investors in tailoring their portfolios to different risk-return profiles, reflecting the diverse opportunities and characteristics inherent in companies of varying sizes.
