Hi all, what's the difference between mutual funds, index funds and unit trusts? Feels like mutual funds and index funds are the same thing? - Seedly
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Anonymous

Asked on 29 Mar 2020

Hi all, what's the difference between mutual funds, index funds and unit trusts? Feels like mutual funds and index funds are the same thing?

What's the difference between the 3? How do you know which is the right investment for you?

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A mutual fund is an open-ended fund that pools investors monies and is invested by a fund manager.

In Singapore, we call mutual funds, Unit Trusts. Not many other countries use this term, but they are interchangeable.

An Index Fund is a type of mutual fund where the fund mandate (the investment objective) is to track an underlying index. It buys securities to try it's best to replicate the index it chose to track.

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