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

A mutual fund and an exchange traded fund (ETF) are both types of investments that allow people to own a portion of a larger group of investments. However, they have some key differences. A mutual fund is a type of professionally managed investment where a person invests their money with a company that pools the money of many investors and invests it in a variety of securities, such as stocks, bonds, and money market instruments. The manager of the fund makes decisions about what securities to buy and sell. Mutual funds are traded at the end of the day, based on the fund’s net asset value. An ETF is also professionally managed, but it is traded like a stock on an exchange. Investors buy and sell ETFs during the day through brokers, like with any other stock. ETFs are comprised of a basket of securities such as stocks, bonds, commodities, and real estate. ETFs can also be traded when the market is open. In summary, the key differences between a mutual fund and an ETF are the way they are managed and traded. Mutual funds are managed by a professional money manager and are traded at the end of the day. ETFs are traded like a stock on an exchange and can be traded when the market is open.

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

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