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

Mutual funds and ETFs are two common types of investment vehicle that allow investors to diversify their portfolios and access investments that might otherwise not be available. The main difference between a mutual fund and an ETF is the way in which their shares are bought and sold. A mutual fund is a pooled investment vehicle that is managed by a professional fund manager. When investors buy into a mutual fund, they purchase shares from a mutual fund company, and the fund company uses the money to invest in a variety of securities. Mutual funds are typically traded once a day after the market closes, and the price of the mutual fund is based on its net asset value. An Exchange Traded Fund (ETF) is also a pooled investment vehicle, but it is traded on the stock market like a regular stock. ETFs are not managed by a professional fund manager, but instead track a market index such as the S&P 500. ETFs can be bought and sold throughout the day, and the price of an ETF is based on the price of the underlying assets it is tracking. In summary, the main difference between mutual funds and ETFs is the way in which their shares are bought and sold. Mutual funds are managed by a fund manager and traded once a day after the market closes. ETFs track a market index and are traded like a regular stock on the stock market. Both types of investment vehicle offer investors the opportunity to diversify their portfolios and access investments that may not be available through other means.

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

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