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Anonymous

24 Nov 2020

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General Investing

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

Please explain in simple terms the difference between an index fund and ETF.

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Dave Loh

24 Nov 2020

Hi there!

An index fund is a fund designed to track a market index such as the S&P 500. It is essentially managed by a fund manager who buys stocks from the market index the fund tracks.

An ETF is a basket of stocks. For example a tech ETF will have tech stocks while a healthcare ETF will have healthcare stocks.

I hope this is simple enough! 😀

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Hustler

24 Nov 2020

The biggest difference between ETFs and index funds is that ETFs can be traded throughout the day like stocks, whereas index funds can be bought and sold only for the price set at the end of the trading day.

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