Investing and the various products that are available to investors can be daunting for most people. Get answers to your investment questions to help build your confidence and investing knowledge.
Investors are faced with what seems like an ever-growing variety of investment products. Today we’re going to look at mutual funds and exchange-traded funds (ETFs). These both pool investors’ money into a collection of securities.
Pricing & Ease Of Trade
MUTUAL FUND - Forward Pricing: generally priced once at the end of the trading day
ETF - Traded on exchanges: can be bought or sold anytime during the trading day
MUTUAL FUND - Cannot be bought on margin
ETF - Because it's an exchange product, can be bought on margin
MUTUAL FUND - Typically actively managed
ETF - Typically passively managed
MUTUAL FUND - Distributions are taxed, whether the distributions are paid out in cash or reinvested in additional shares
ETF - Taxed when investor sells shares