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ETF vs. Mutual Fund
Posted on 5/3/21 at 12:57 pm
Posted on 5/3/21 at 12:57 pm
I know there is a difference but I don't truly understand the difference. Can somebody explain it to me?
5
Posted on 5/3/21 at 1:06 pm to tgrmeat
Both mutual funds and ETFs hold portfolios of stocks and/or bonds and occasionally something more exotic, such as precious metals or commodities.
Both can track indexes as well, however ETFs tend to be more cost effective and more liquid as they trade on exchanges like shares of stock.
Mutual funds can provide some benefits such as active management and greater regulatory oversight, but only allow transactions once per day and tend to have higher costs.
Both can track indexes as well, however ETFs tend to be more cost effective and more liquid as they trade on exchanges like shares of stock.
Mutual funds can provide some benefits such as active management and greater regulatory oversight, but only allow transactions once per day and tend to have higher costs.
Posted on 5/3/21 at 1:12 pm to tgrmeat
quote:
I know there is a difference but I don't truly understand the difference. Can somebody explain it to me?
If I recall correctly, there is little to no difference. I think ETFs might slightly edge Mutual Funds with some tax benefits.
ETFs trade market price. Mutual Funds trade at the day's close.
Posted on 5/3/21 at 1:18 pm to tgrmeat
I’ll also add that if you want to auto invest $X per month it will have to be a mutual fund
Posted on 5/3/21 at 1:26 pm to whiskey over ice
quote:I’ll also add that this post is false, and you can invest $X per month (or day, week, year, or even multiple times a day), in ETFs at a number of brokerages.
I’ll also add that if you want to auto invest $X per month it will have to be a mutual fund
Posted on 5/3/21 at 1:35 pm to tgrmeat
Posted on 5/3/21 at 1:42 pm to tgrmeat
ETFs on average will be cheaper expense ratio wise vs. mutual funds. You also wont find "weird" fees like front load fees or early redemption fees, etc with ETFs like you will with mutual funds I believe.
Like someone else said, ETFs you buy/sell like stocks at any point. Mutual funds are traded once a day on a calculated price. Mutual funds are actively managed vs. passive ETF, so you would find more turnover in mutual funds than ETFs typically with someone trying to "beat" the market.
I've got ETFs and mutual funds, there's pros and cons to each. You'll see the infamous 80-90% stat of mutual funds dont beat the market, so just do ETFs/index funds instead to save the expenses at least. The key is the mutual funds that do beat the market, can get you (noticeably) better returns, but you need to really stick with it and be more in tune than you would say with market index ETFs. Market ETFs are definitely the better choice for hands off investors.
Like someone else said, ETFs you buy/sell like stocks at any point. Mutual funds are traded once a day on a calculated price. Mutual funds are actively managed vs. passive ETF, so you would find more turnover in mutual funds than ETFs typically with someone trying to "beat" the market.
I've got ETFs and mutual funds, there's pros and cons to each. You'll see the infamous 80-90% stat of mutual funds dont beat the market, so just do ETFs/index funds instead to save the expenses at least. The key is the mutual funds that do beat the market, can get you (noticeably) better returns, but you need to really stick with it and be more in tune than you would say with market index ETFs. Market ETFs are definitely the better choice for hands off investors.
This post was edited on 5/3/21 at 1:45 pm
Posted on 5/3/21 at 10:11 pm to JDPndahizzy
All the stuff that Hizzy said and ETF’s can be easier to sell off or get rid of if you decide to make a sudden change, for instance, my brother has a Fidelity account and last year about the time COVID and other factors affected the markets in March/April, he had been increasing his investments and had just moved several thousand dollars into 4-5 Fidelity mutual funds. Within a week the market started dropping and he was panicked trying to undo the investments he had made 7-10 earlier.
The mutual funds don’t sell real time and there’s wait times and he got alerts telling him he was making “round trip” sales and they may violate government investment rules. He was able to go ahead and sell and took less loss than he would have later but he was blocked from buying Fidelity mutual funds for 90 days, which got him started buying ETF’s.
The mutual funds don’t sell real time and there’s wait times and he got alerts telling him he was making “round trip” sales and they may violate government investment rules. He was able to go ahead and sell and took less loss than he would have later but he was blocked from buying Fidelity mutual funds for 90 days, which got him started buying ETF’s.
Posted on 5/4/21 at 10:15 am to buckeye_vol
quote:
I’ll also add that this post is false, and you can invest $X per month (or day, week, year, or even multiple times a day), in ETFs at a number of brokerages.
I don’t doubt that some brokerages allow you to auto purchase etfs but just doing quick search it looks like almost all of the big ones require auto purchases be mutual funds (not including robo investing). Vanguard, TD Ameritrade, Schwab, Fidelity. You can do auto deposit but you have to initiate the purchase of the ETF yourself. Am I wrong?
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