What is an ETF?

As the popularity of ETFs continue to increase relative to the mutual fund industry, increasingly investors and people who contribute to retirement savings plans and IRA’s are asking the question:

What is an ETF?

ETF is the acronym for Exchange-Traded Fund.
Conceptually the simplest way to think of an ETF is a fund similar to a mutual fund, representing a basket of stocks, which trades on a stock exchange.