An Exchange-Traded Fund (ETF) is a pooled fund (practically identical to a mutual fund in structure) that trades intra-day on a stock exchange.
Pooled funds are typically diversified across a number of underlying securities, and can be both actively managed by an investment manager, or can "passively" track a market index.
When you buy shares of an ETF, you own a pro-rata portion of all of the securities held in that ETF and can participate in its price changes, as well as distributions (if any).
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