Mutual funds | ETFs | |
---|---|---|
Investments | Offer a diverse range of stocks and bonds, aiming to outperform the market. | Consist of a broad selection of stocks and bonds, designed to mirror a specific index or asset class. |
Trading availability | Can only be traded at the end of the day, after 4 p.m. Eastern. | Can be traded throughout the day, providing flexibility to investors. |
Share price | Value is based on NAV after market close. | Price fluctuates throughout the day, similar to individual stocks. |
Fees | Fee structure can vary from low to high. | Generally have low fees compared to mutual funds. |
Management | Often actively managed by a professional investment advisor. | Typically passively managed, tracking the performance of an index. |
Who holds them | Commonly included in employer-sponsored retirement plans. | Preferred by individual investors for IRAs or taxable accounts. |