Short for Exchange-Traded Fund — a single investment that holds a basket of many underlying stocks, bonds, or other assets, and trades on a stock exchange throughout the day just like an individual stock.
Instead of buying one company's stock and betting on that one company, an ETF lets you buy a small slice of hundreds (or thousands) of companies in a single purchase. Buy one share of an S&P 500 ETF, and you instantly own a tiny piece of 500 different US companies — Apple, Microsoft, and 498 others — all at once, for whatever that one share costs.
Diversification without the work: instead of researching and buying 500 stocks individually, one ETF purchase does it for you, usually for a very low annual fee (see MER). That combination — broad exposure, low cost, easy to buy and sell — is why ETFs are the backbone of most simple, long-term investing strategies.