What is the difference between a mutual fund and an ETF (Exchange Traded Fund)?

The main difference between a mutual fund and an ETF (Exchange Traded Fund) is the way they are bought and sold on the stock market. Mutual funds are purchased through a fund manager and are then exchanged for shares of the fund. ETFs, on the other hand, are bought and sold directly on the stock market like stocks, and prices are determined by supply and demand. Mutual funds are actively managed by a fund manager. This means that the fund manager is constantly buying and selling stocks and bonds to try to maximize returns. This also means that fees are charged, which can take away from the amount of profit you make from investing. ETFs are passively managed, meaning that there is no fund manager making decisions. ETFs also have lower fees than a mutual fund because there is no active management. ETFs also create diversification, which can be beneficial for investors. It is important to note that both mutual funds and ETFs come with risks, but with the right research and understanding of both, you can decide which is the better fit for your investment portfolio. You should also make sure to check with your state laws regarding investment fraud to ensure your investments are safe.

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What is the difference between a mutual fund and an ETF (Exchange Traded Fund)?

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