What are the pros and cons of mutual funds vs etfs?

Both mutual funds and ETFs offer investors bundled investment product options. Mutual funds have a more complex structure than ETFs, with different classes of shares and fees.

What are the pros and cons of mutual funds vs etfs?

Both mutual funds and ETFs offer investors bundled investment product options. Mutual funds have a more complex structure than ETFs, with different classes of shares and fees. ETFs usually attract investors because they track market indices, and mutual funds attract because they offer a wide selection of actively managed funds. Mutual funds are usually more actively managed compared to ETFs, but you can also buy mutual funds that track a market index.

Once again, index funds tend to have lower spending ratios than actively managed mutual funds, and the expense ratios are often identical to those of their ETF counterparts. ETFs and mutual funds have similar cost structures, but ETFs tend to have lower fees than mutual funds. For example, ETFs generally have lower minimum initial purchase requirements and lower expense ratios than mutual funds. However, ETF trading generates brokerage fees (when applicable), while mutual funds do not.

However, some mutual funds carry what is called a charge, which is a fee charged at the time of purchase or at the time of sale.

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