As seen in our previous articles, we learnt that Mutual Funds and ETFs are like very similar cousins. They are both a collective investment – a pool of money from a bunch of different investors that purchases and invests in a variety of securities.
So what are the main differences between the two? Find out below:
|1. Price is set once a day
2. Actively managed by an expert
3. Less research needed from you
4. Purchased from a broker, advisor or fund
5. Higher fees
|1. Traded all day – price constantly changing
2. Managed by yourself
3. More research needed from you
4. Purchased on the stock market
5. Lower fees
It’s totally up to you to decide which one you prefer. Up until now, Mutual Funds have been more popular. Today, there are about 13 trillion dollars invested in Mutual Funds compared to 2 trillion in ETFs. However, ETFs are growing in popularity.
Which one would you invest in? Let us know in the comments below!