What is Exchange Traded Fund ETF ?

Exchange Traded Funds or ETF's are mutual funds which are listed and tradable in the stock exchanges. They vary from the tradtional open-ended funds which are purchased and redeemed on their prevailing Net Asset Values (NAV's) as established by the Asset Managing Company.

ETFs can be of stocks, bonds, commodities or even a basket of mixed asset classes or derivatives.

A passively managed fund which is traded in the market like normal scrips

Exchange traded fund (ETF) is a basket of securities that trade at the stock exchange. Usually ETF can be traded like single stock. The major advantage is the cost structure of ETF is low as compared to Mutual fund units (shares in US).