What is the difference between a mutual fund and an exchange traded fund?

The main difference between a mutual fund and an exchange traded fund (ETF) is how they are traded. A mutual fund is purchased directly from the fund company that manages it. This can be done through an online broker or a financial advisor. The fund company charges a fee to manage the fund, which is typically taken out of the total return of the fund. On the other hand, an ETF is traded like a stock on an exchange, meaning that it can be bought and sold at any time during regular trading hours. ETFs have lower fees than mutual funds because they do not have a fund manager, and instead are passively managed by indexing a particular asset class. In addition, ETFs can also be traded throughout the day, unlike mutual funds which are priced only once a day after the market closes. Lastly, ETFs have more liquidity than mutual funds since they are traded like stocks. Overall, mutual funds are more expensive to manage and buy, and their return can be affected by the fees. However, ETFs are cheaper and easier to trade due to the additional liquidity and access to the market that they provide. For investors looking to save on fees while still gaining access to certain markets, ETFs are a great choice.

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What is the difference between a mutual fund and an exchange traded fund?

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