What's the difference between an index fund and an ETF?

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April 2017
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Both are very low cost funds which invest in a broad index so there really isn't much difference between the two. The primary differences is that an ETF can be traded throughout the day like a stock, whereas a mutual fund can only be bought or sold at the end of the day's Net Asset Value (NAV). So an ETF is more flexible, but if you are not an active investor, it really won't make much of a difference. Active investors use ETFs. I personally would use an ETF either way just to have more flexibility.

Hope this helps and best of luck, Dan Stewart CFA®

April 2017
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