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Any thoughts on ARKK and MGK ?
Anyone going in big on gold/oil ETFs?
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You’re confusing a couple ideas. Mutual funds and Exchange traded funds are both funds. Pooled assets investing in ... something. Both MF and ETF can be actively or passively managed. Active meaning there is a manager researching and trading at their discretion. Passive meaning that, usually, that there is some sort of benchmark index that they are tied to. There are many different indexes out there. S&P500 is an example. Russell 2000 is another. Dow Jones broad market index another. But each index is just a listing of stocks. You can’t invest in an index. So you invest in a fund (mutual fund or exchange traded fund) that TRIES to mimic (track) an index.
The differences in MF and ETF are structural. ETF trades on an exchange, like a stock. You can buy and sell throughout the day. You are buying and selling on the secondary market, from other investors. Mutual funds orders are executed once a day, and buy/sell orders are made at the end of the day, after the market closes.
There can be tax differences as well. Typically ETFs are more tax efficient (unless you are using vanguard MF). Again. A structural difference.
You can find actively managed etfs. You can find passive ETFs. You can find active MF. You can find passive MF.
D1: Sorry, if it seems like questions are piling on, but I read the Fidelity link and the following text was a little hard to follow, if you have a minute to explain what this is saying:
“In contrast, an ETF manager accommodates investment inflows and outflows by creating or redeeming “creation units,” which are baskets of assets that approximate the entirety of the ETF investment exposure. As a result, the investor usually is not exposed to capital gains on any individual security in the underlying structure. “
They are actively managed in a way that fund manager will try to make sure it follows an index. For mutual fund, fund manager can buy whatever stock they want, without regard to any index
D1 explained in much more detail. You can also have a mutual fund that only invest in index (vanguard has tons).
ETFs have lower fees and in general outperform actively managed funds during a bull market , actively managed funds can perform better during a bear market.
Can you purchase both ETFs and MFs through a really simple platform like Betterment?