Mutual funds, exchange-traded funds (ETFs), and exchange-traded notes (ETNs) are all investment vehicles, but they differ in how they are structured, traded, and taxed.
Mutual funds are professionally managed investment portfolios that pool money from many investors to purchase a diversified mix of stocks, bonds, or other assets. They are bought and sold at the end of each trading day at their net asset value (NAV), which is the total value of the fund’s holdings divided by the number of shares outstanding. Mutual funds may charge fees such as expense ratios, loads, or redemption fees.
ETFs are similar to mutual funds in that they hold a basket of assets, but they are traded on exchanges throughout the trading day like a stock. ETFs can be bought and
sold like stocks at market prices, and their prices may fluctuate throughout the day based on supply and demand. They often have lower expense ratios than mutual funds, and some ETFs can be traded commission-free on certain platforms.