An exchange traded fund (ETF) is similar to a managed fund but it has shares listed on the stock exchange which can be bought or sold just like a share.
ETFs typically invest in a basket of shares to mimic a particular index. Managed funds invest pooled money in the stock market but you can't trade them on the stock exchange - you have to buy 'units in a managed fund. There is a huge range of managed funds and many have a specific investment niche and varying degrees of active or passive management.
Both ETFs and managed funds can be a low-cost way to gain exposure to a preferred market or index with just one purchase. ETFs and managed funds can also be compared to listed investment companies and trusts.