Smilarities between ETFs and mutual funds

Exchange-Traded Funds (ETF)

Some investors in the stock market might not realize that mutual funds and ETFs have both similarities and differences. However, it is important to understand their basics before determining a financial plan or an investing time frame in the stock market. Precisely, Exchange Traded Funds (ETF) refers to a number of securities that help to monitor a specific index. On the contrary, some shareholders who trade in diversified holdings create and fund investment programs known as mutual funds. Indeed, both ETFs and mutual funds play a significant role in the stock market investing. For this reason, we will explore the similarities and differences between the two and then highlight several benefits and drawbacks.


ETFs and mutual funds are undoubtedly similar except for a few differences that set them apart.
1. Passive Management
Shareholders can manage most ETFs passively just like index mutual funds. As a result, investors can utilize both ETFs and mutual funds to determine the performance of a specific index in the stock market. Furthermore, this similarity makes them prudent types for portfolio construction and diversification.
Investment Options
Both ETFs and mutual funds represent professional regulated collections of bonds and individual stocks. This gives investors a wide variety of investment choices. It is also less risky to invest in ETFs and mutual funds than in individual bonds and stocks.
Let’s now consider several differences between ETFs and mutual funds.
1. Product Structure
ETFs can be broken down into three different types. First, the Exchange-Traded Unit Investment offers investors some options such as reinvesting dividends every quarter and using derivatives in the security fund. Second, the Exchange-Traded Grantor Trust enables an investor to own shares in the investment company and to receive direct payments of dividends. Finally, the Exchange-Traded Open-End Index Fund has limited investment options to 25 percent or less in a single issue and additional weighing limits for specific types of funds.
Mutual funds, on the other hand, can be classified into two distinct types. First, the Open-ended funds enable investors to earn more shares based on the times they purchase the fund. In other words, there are is no limit of shares that an investor can earn when trading in the open-ended funds. Second, close-ended funds offer minimal shares to investors. As a result, the demand for the fund’s shares determines the value of the fund.
Trading and Liquidity
Trading and liquidity of stocks also expose another significant difference between ETFs and mutual funds. For instance, investors can trade ETFs just like a stock. In other words, investors can buy ETFs on a margin, limit them, and trade them during market hours. For this reason, investors can manage loss orders and place orders with a variety of limits. On the contrary, shareholders must calculate a net asset value at the end of the day before making a purchase in mutual funds. Nevertheless, mutual funds have a better settling date after their trade than the ETFs.
Pros and Cons
The significant benefits of both Mutual funds and ETFs have undoubtedly taken stock market investing to a higher level throughout decades. However, both have drawbacks that investors should consider when trading in the stock market.
1. ETFs
ETFs have several benefits over the mutual funds. For instance, investors can buy and sell ETFs throughout the day after the opening of markets, unlike mutual funds that require shareholders to trade them once per day after the closing of markets. ETFs pricing is also continuous during ordinary exchange hours. Investors can also trade ETFs on almost every major asset class, commodity, and currency globally. Furthermore, some new ETF structures have emerged in the recent past that can embody a specific trading strategy. As a result, investors can now invest continuously in the highest yielding currencies.
While they have many advantages, ETFs carry drawbacks too. For instance, investors in some sectors or foreign stocks might not access large-cap stocks because of a limited group of equities in the market index. Furthermore, some investors have a long-term horizon of 10-15 years and thus may not realize benefits from the changes in the daily ETFs price changes.
2. Mutual Funds
Mutual funds have various advantages which make them a popular investment vehicle in the stock market. For instance, mutual funds have advanced portfolio management such that investors get a professional who helps them to buy and sell bonds or stocks. Investors can also easily buy mutual funds and trade them only once every day at the closing net asset value.
On the contrary, an investor should consider some drawbacks before trading in mutual funds. For instance, an investor may realize high expense ratios and sale charges if he or she does not pay attention when trading in mutual funds. Furthermore, mutual funds’ managers who abuse their authorities and conduct unnecessary trading may possibly cause churning, window dressing, and a turnover.
In conclusion, both ETFs and mutual funds are an integral part of stock market investing. Some people, however, do not understand that the two have evident similarities and differences. Furthermore, ETFs and mutual funds have both benefits and drawbacks. Hence, it is advisable that an investor considers all these facets of both ETFs and mutual funds before making a final trading decision in the stock market.

Don't use plagiarized sources. Get Your Custom Essay on
Smilarities between ETFs and mutual funds
Just from $9/Page
Order Essay

Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently

Online Academic Help With Different Subjects


Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.


Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!


While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.


Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.


In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.


Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.


We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!


We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.


Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper