An ETF, or exchange-traded fund, is a type of investment fund that is traded on stock exchanges, similar to individual stocks. ETFs typically track an underlying asset, index, or basket of assets, such as stocks, bonds, commodities, or currencies. They offer investors a way to diversify their portfolios and gain exposure to various markets with relative ease. ETFs are known for their liquidity, lower costs compared to some other investment funds, and the flexibility to be bought or sold throughout the trading day. They have become increasingly popular investment vehicles for both individual and institutional investors.