As a young investor, would it be better to invest in mutual funds or ETFs? - Seedly
 

ETF

Asked by Anonymous

Asked on 06 Mar 2019

As a young investor, would it be better to invest in mutual funds or ETFs?

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Both of them are funds. One is open ended and the other close ended.

I suggest understanding investment a little more before purchasing any financial product.

I personally have access to both, but even then I choose to go for a Mutual Fund portfolio because I am a fan of active management and don't agree so much on broad index investing.

I choose my fund managers and build a stronger risk adjusted return portfolio.

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MT2020
MT2020
Level 6. Master
Answered 11h ago

I would say etf, as there is lower charges which could make a huge impact on your returns over the long run. I also like as etfs will track the index and you will be getting returns similar to the index. Mutual funds will attempt to beat the index and generate higher returns but there is higher risk involved as well. So in the the end it really depends on your style of investing.

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Zann Chua
Zann Chua
Level 6. Master
Answered on 06 Mar 2019

Hello!

It is important to better understand both types of investments before engaging in any investment.

Here are some things to consider when deciding which to invest in.

  • The minimum cost to invest in ETFs are usually lower than mutual funds, so if you do not have that much money to invest, ETFs may be a better choice.

  • ETFs trade like stocks in that investors can buy and sell shares on the open market throughout the day. Index mutual funds trade once per day, after the market closes, so investors have less control over the price at which they buy or sell shares.

  • ETFs can be more tax-efficient than index mutual funds.

hope these helps!

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