+- Business, Investment, & Insurance Forum (https://investmentforums.net)
+-- Forum: Investment Forums (https://investmentforums.net/forumdisplay.php?fid=4)
+--- Forum: Mutual Funds/Futures/Options/ETFs (https://investmentforums.net/forumdisplay.php?fid=10)
+--- Thread: ETFs Vs. Mutual Funds (/showthread.php?tid=172)
ETFs Vs. Mutual Funds - Maria - 06-12-2023
Exchange-traded funds (ETFs) and mutual funds are both investment vehicles that pool money from many investors to buy a diversified portfolio of stocks, bonds, or other assets. Nevertheless, there are numerous key differences between ETFs and Mutual Funds
Structure: ETFs are traded on stock exchanges, like individual stocks, and can be bought or sold at any time during market hours. Mutual funds, on the other hand, are priced once a day at the market close.
Management: ETFs are passively managed, meaning they aim to track the performance of a specific index, such as the S&P 500. Mutual funds are actively managed, meaning a fund manager makes decisions on what to buy and sell.
Costs: ETFs typically have lower expense ratios than mutual funds, due to their passive management style.
Taxation: ETFs tend to be more tax-efficient than mutual funds, as they are structured in a way that minimizes capital gains distributions.
Investment style: ETFs offer more flexibility and versatility in terms of investment style and asset classes, as there are ETFs available for a wide range of market segments and investment strategies. Mutual funds are typically more limited in terms of investment options.
Ultimately, the choice between an ETF or a mutual fund will depend on the individual investor's goals, risk tolerance, and investment style.
RE: ETFs Vs. Mutual Funds - Jojo - 05-18-2024
ETFs (Exchange-Traded Funds) trade like stocks on exchanges, offering flexibility and lower fees. For instance, SPDR S&P 500 ETF (SPY) tracks the S&P 500 index. Mutual funds are bought directly from the fund company at day's end price, with higher fees and minimum investments. An example is Vanguard 500 Index Fund (VFIAX), also tracking the S&P 500 but with active management options.