Since the prior answer is highly biased and to some extend factual incorrect, lets try with a different one.

Lets say you want to invest in Chinese companies. First option is to choose which ones you want to invest in. This requires a lot of knowledge and constant attention. The 2nd option is to pay someone to do that for you. This is how big companies like Black Rock make the most of their money. This is expensive for you, though. The third option is to let an algorithm do that for you. And thats ETFs.

Etfs have couple of advantages: 1. They cost basically nothing. You can get them for as low as 0.05 % of your invested capital, while active managed fronds take 3 % or even higher. 2. You aren’t depending on some kind of genius manager to get your profits, but have a 100 % transparent algorithm at your hand. 3. Since these ETFs aren’t actively managed you need far less people working at them and the more people invest, the cheaper they become for everyone. Companies like Vanguard are owned by the people buying their products, basically turning capitalism upside down, while participating and profiting from it.

The best known ETFs are the iShares MSCI World and the Vanguard FTSE all-world, where MSCI and FTSE are the companies that developed the algorithm and iShares and Vanguard are the companies managing the shares for you (iShares is Black Rock). These are investing in almost every company on earth, which is publicly traded. This yields an average return of roughly 7–8 % per year in the long term.

Back to the example: you want to buy Chinese companies, but don’t know which ones? And you don’t want to pay 3 % per year to some dude buying them for you? Then just buy for example the MSCI China ETF (or any other), where you are buying shares from over 750 Chinese companies and hopefully profit from the Chinese economic development.