ETFs vs. Mutual Fund online

Business & Finance
Tutor: None Selected Time limit: 1 Day

Hello . I have some questions

Three advantages of exchange traded funds and 3 advantages of mutual funds?

Explain in at least 3-5 sentences how exchange traded funds and mutual funds are similar?

Explain in at least 3-5 sentences how exchange traded funds and mutual funds are different?

Please dont copy some answers from any websites..

I need your own words

Jul 17th, 2015

Thank you for the opportunity to help you with your question!

advantages of ETFs over mutual funds include the following:

  1. Tax-Friendly Investing - unlike mutual funds, ETFs are very tax-efficient. Mutual funds typically have capital gain payouts at year-end, due to redemptions throughout the year; ETFs minimize capital gains by doing like-kind exchanges of stock, thus shielding the fund from any need to sell stocks to meet redemptions. Therefore, it is not treated as a taxable event.
  2. No Investment Minimums - Several mutual funds have minimum investment requirements of $2,500, $3,000 or even $5,000. ETFs, on the other hand, can be purchased for as little as one share.
  3. Lower Cost Alternative - The average mutual fund still has an internal cost well over 1%, whereas most ETF funds will have an internal expense ratio typically between 0.30-0.95%. Plus, ETFs do not charge 12b-1 fees (advertising fees) or sales charges, as do many mutual funds.
Mutual funds are able to take advantage of their buying and selling size and thereby reduce transaction costs for investors. When you buy a mutual fund, you are able to diversify without the numerous commission charges.

ETFs have several similarities to mutual funds. Like a Mutual Fund, an ETF is a pool or basket of investments. However, ETF’s many times have lower expenses then a similar mutual fund in that there are no loads and the operating expenses are often lower.

ETFs trade throughout the trading day, like a stocks, while mutual funds trade only at the end of the day at the net asset value (NAV) price.

Please let me know if you need any clarification. I'm always happy to answer your questions.
Jul 17th, 2015

Did you know? You can earn $20 for every friend you invite to Studypool!
Click here to
Refer a Friend
...
Jul 17th, 2015
...
Jul 17th, 2015
Dec 3rd, 2016
check_circle
Mark as Final Answer
check_circle
Unmark as Final Answer
check_circle
Final Answer

Secure Information

Content will be erased after question is completed.

check_circle
Final Answer