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| ETFs and mutual funds are fairly similar concepts. Biggest difference is ETFs trade throughout the trading day whereas mutual funds only trade once a day. Also mutual funds tend to have minimum investment requirements. Appears to me that the older generation is more used to mutual funds and ETFs have become more popular recently. As far as you mentioning the index funds, an index fund is not actively managed and is set as is. An S&P 500 index fund is basically a collection of those companies to match the S&P 500 return. The reason Apple, Microsoft etc almost always show up in index funds is they check a lot of boxes for different index funds whether it be Large Cap, Tech, S&P 500, etc. An actively managed fund is one where a person is picking the stocks throughout the day and basically managing the fund for you. The popular ARKK ETF is an example of that. It does not track any particular index but its owner is basically trading stocks with your money and giving you the return minus a small fee. | |
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question ETF vs mutual fund`
