An ETF is a basket of stocks that reflects the composition of an Index, like S&P CNX Nifty or BSE Sensex.
They are traded on exchanges like stocks.
They enable investors to gain broad exposure to entire stock markets in different Countries and specific sectors with relative ease, on a real-time basis and at a lower cost than many other forms of investing.
ETFs trading value is based on the net asset value of the underlying stocks that it represents
Think of it as a Mutual Fund that you can buy and sell in real-time at a price that change throughout the day.