Exchange Traded Funds (ETFs) are a relatively new phenomenon and are gaining popularity rapidly. This post outlines the key features of an ETF.
ETFs are like mutual funds because they hold an underlying asset like stocks, debt, commodities future contracts etc. If you are new to the concept of an ETF, think of it as a mutual fund, and build your understanding from thereon. An example of an ETF is the SBI Gold ETF, which holds physical gold as its underlying asset.