An exchange-traded fund is an investment fund, similar to a mutual fund, which is pegged to a financial index. Unlike mutual funds, which are priced once in a day, an exchange traded fund trades on exchanges throughout the day, just like stocks.
ETFs were incepted in 1993 and, since then, have grown in popularity as an investment tool. They are passively managed, i.e., there is no fund manager.
The following is an infographic from Mint that provides you a lot of information about ETFs in a very easy to understand manner.
Click on the image to open in large size.
Signup for our email updates and get "Risk Management Essentials" free ebook