Mutual Funds, ETFs, and Index Funds: What's the Difference and Which Is Right for You?
Mutual funds, ETFs, and index funds are all investment vehicles that offer diversification, but they differ in structure, management, and cost. Mutual funds are actively managed and traded once daily, often with higher fees. ETFs are traded like stocks throughout the day and usually have lower fees due to passive management. Index funds track specific market indexes and offer low-cost, long-term investing. Choosing the right one depends on your goals: active management and convenience (mutual funds), flexibility and low cost (ETFs), or simple, steady growth (index funds). Each suits different strategies and risk levels.