An ETF bundles many stocks or bonds into one fund, but unlike a regular mutual fund it is listed on an exchange and its price moves throughout the trading day. You buy and sell ETF units through a demat and trading account, just like a stock.
Most ETFs are passive, meaning they simply mirror an index such as the Nifty 50 rather than being actively picked by a manager. That keeps their expense ratio very low.
For example, a Nifty 50 ETF rises and falls with those 50 companies. ETFs offer instant diversification and low cost, though you need a demat account and pay small brokerage on each trade.