Invest in mutual funds or ETFs ? - Seedly

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Asked by Anonymous

Asked on 06 Apr 2019

Invest in mutual funds or ETFs ?

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Luke Ho
Luke Ho, Money Maverick at Money Maverick
Level 6. Master
Answered on 09 Apr 2019

Depends what kind of returns you want.

Mutual funds can offer you either market beating returns or returns that have a better return-risk ratio than the market. Otherwise, don't invest in them.

ETFs will give you market returns minus tax, transactional fees or reinvestment fees.

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Jonathan Chia Guangrong
Jonathan Chia Guangrong, Fund Manager at JCG Fund
Level 6. Master
Answered on 06 Apr 2019

Etfs will be a better choice, fees wise. Mutual funds suck out a lot of profits via fees over the long run. Not to mention that there's bound to be periods with negative returns yet fees still need to be paid.

Etfs are also more liquid, as they are listed on stock exchanges and you can transact during market hours. Mutual funds need to transact via the fund house and sometimes this may take days.

Consider building an all weather Etf portfolio if you are interested in the Etf route. This is to prevent significant drops in value during market downturns. Hope this helps

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Lok Yang Teng
Lok Yang Teng
Level 6. Master
Answered on 06 Apr 2019

Mutual funds and ETFs operate on different concepts:

  • Mutual funds depends on the fund manager while ETFs depends on the stock market (general economic circumstance)
  • Mutual funds has higher transactional and management fee than ETFs

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