Index Fund vs. ETF: What’s the Difference?

Index Fund vs. ETF: What’s the Difference?

Understanding the difference between an index fund (often invested in through a mutual fund) and an exchange traded fund (ETF) is important to understanding investing basics. Here is an overview of what an ETF is and how it differs from mutual funds.Exchange traded funds ( ETFs)

Index Mutual Funds

These types of funds follow a benchmark index, like the S&P 500, and have lower expenses and fees than funds that are actively managed.

Exchange Traded Funds

ETFs are baskets of assets traded like securities

What Do the Experts Say?

Will Thomas, CFP®, CIMA®, CTFA The Liberty Group, LLC, Washington, DC

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