nreid1, welcome to the forum.
Exchange-traded funds (ETFs) and mutual funds are both vehicles for holding packaged collections of investable assets. But there are some differences.
Buying or selling a share of a mutual fund is done directly with the mutual fund company rather than through the open stock market. Because the price of a share of a mutual fund is determined directly by the prices of the held assets, the price of a share of a mutual fund can only be determined after the market closes and share prices have settled for the day; thus, any mutual fund share transactions only happen after the market closes.
On the other hand, a share of an exchange-traded fund is, as the name suggests, traded on the open market exactly as is a share of stock in an individual company, which means the price of an ETF share is constantly varying throughout the day as the market rises and falls.
You may find this article from the Bogleheads wiki helpful: ETFs vs mutual funds
Exchange-traded funds (ETFs) and mutual funds are both vehicles for holding packaged collections of investable assets. But there are some differences.
Buying or selling a share of a mutual fund is done directly with the mutual fund company rather than through the open stock market. Because the price of a share of a mutual fund is determined directly by the prices of the held assets, the price of a share of a mutual fund can only be determined after the market closes and share prices have settled for the day; thus, any mutual fund share transactions only happen after the market closes.
On the other hand, a share of an exchange-traded fund is, as the name suggests, traded on the open market exactly as is a share of stock in an individual company, which means the price of an ETF share is constantly varying throughout the day as the market rises and falls.
You may find this article from the Bogleheads wiki helpful: ETFs vs mutual funds
Statistics: Posted by oldcomputerguy — Mon Aug 12, 2024 4:35 am