Exchange-traded funds and mutual funds both are created with an idea of pooled funds investments that tries to track and replicate the benchmark indices. Even with similar concepts, both concepts have diversification which is state below:
- Exchange trade mutual funds are passively managed while mutual funds are actively managed investments.
- Exchange rates track indices while mutual funds offer a wide range of multiple assets which are chosen after extensive research by the fund management team.
- ETFs actively trade throughout the trading day while mutual fund trades close at the end of the trading day.
