Today we’re going to start by talking about the differences between ETFs (Exchange Traded Funds) and Mutual Funds. Then, we’ll wrap this series on funds up by talking about when one or the other might be more appropriate. For those who missed our earlier segments, you can check out our mutual fund primer as well as our article on key things to consider when purchasing a fund.
One important difference between mutual funds and ETFs is very few ETFs are actively managed, while the majority of mutual funds are. So, if you are looking to match the performance of a particular benchmark index, your primary options are ETFs or index funds (a specific type of mutual fund). If you are hoping to beat the index, you will most likely look towards a mutual fund.
How you buy and sell these assets in one of their biggest differences. Funds are bought and sold through the fund company and are only traded once per day. ETFs are traded on public exchanges and trade throughout the Continue reading…