Ok, so once and for all -- what's the difference between an exchange-traded fund (ETF) and a mutual fund?!
Watch the video above and you'll know in 60 seconds!
But both are baskets of stocks. ETFs generally follow an index or sector, whereas mutual funds can basically be filled with anything the fund manager decides on.
There are other differences too. To start, you can trade ETFs all day, like you would any other stock. So they're a great vehicle for active traders.
On the flip side, you only can trade mutual funds once a day, right after the market closes at 4p EST. It's a weird little quirk for mutual funds, but the price (or net asset value, a.k.a. NAV) resets once per day -- after 4:00 PM EST, when the markets are closed.
And it is at that time, you can buy or sell mutual fund shares.
ETFs generally have no investment minimums, while most mutual funds do.
And there are even more differences, so be sure to watch the video above to determine which investment is right for you!
