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

Hi there!

This is a technical question, let me try and break it down for you using the context of stocks without going into too many technicalities.

• An ETF is a basket of stocks. ETFs can have many different themes, from Healthcare ETFs to Tech ETFs etc.

• An index ETF tracks a certain index. An example would be the SPY ETF which tracks the S&P 500 index.

• An index fund is a Unit Trust/ mutual fund that tracks a certain index. An example of an index fund would be Infinity US 500 Stock Index Fund which tracks the S&P 500 index.

ETFs trade like stocks, you buy a certain number of units of the ETF, pay a commission fee to a brokerage company and custodian fees might be charged by the brokerage to keep your investment with them.

When you invest in an index fund, the fund manager charges you a sales charge (like a commission) and a management fee for managing the fund.

Hope I gave you some idea on the differences!

If you would like me to explain in other context, feel free to leave a comment.

An ETF is a basket of securities that usually track an index.

• I say this because you can have an ETF that tries to beat an index, or bet against an index.

• An index ETF would be an ETF that tracks an underlying index.

To understand what an index fund is you need to know what is a mutual fund.

• A mutual fund is made up of a pool of money collected from many investors to invest in securities

• An index fund is a type of mutual fund that simply tracks an index.

https://www.investopedia.com/terms/m/mutualfund...