A couple of points – some of the information given above is simply incorrect.
1) an Exchange Traded Fund is synthetic (i.e. made up) as a collection of individual stocks usually in a particular area (industrial, transportation, retail, etc.) that have been collected by the fund manager. The ETF – as i said, totally invented by the manager – is assigned its own stock symbol and trades just like any other stock.
But that ETF doesn’t have any assets of its own (for example, Ford has factories and real estate, Bank of America has assets and customers and bank accounts) – the ETF is simply a mélange of all of the underlying stocks that were picked. That’s why it is synthetic – its price is based on the combined prices of the different stocks in the ETF.
2) ETFs are most similar to the old fashioned Mutual Funds, in terms of how stocks are selected and managed. Very similar. The difference is that mutual funds have a whole different set of rules and regulations, laws, taxation rules, etc. – while ETFs are treated as a stock. (Example: Look at all of the different available ETFs in the transportation area: https://etfdb.com/etfs/industry/transportation/ compared with Transportation Mutual Funds. https://www.investopedia.com/articles/investing/100715/top-4-transportation-mutual-funds.asp)
3) As far as I know, selling a stock and buying an ETF is not tax free – you’ll sell the stock and take your gain (or loss) and then go and buy the ETF shares. But there are tax implications when you sell the stock.