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🦧 mutual fund vs etf
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🦧 mutual fund vs etf

Ape of Omaha
Jul 27, 2022
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🦧 mutual fund vs etf
www.wiseape.fyi

🤔 why even bother?

we once only cared about mutual funds… but somewhere down the road, etf’s became cool and now there’s a huge difference in fund flow between mutual funds and etf’s

 

💡 what’s the difference?

  • it's a little more interactive investing in an etf

    • an etf can be bought and sold intra-day just like any other stock

    • i.e. SPLG 0.00 (buying one share of this, your effectively getting exposure to companies in the s&p500 index!)

    • mutual funds can only be bought at the end of each trading day

  • history

    • mutual funds have been around since 1924 (think fidelity, ishares, vanguard, charles schwab, etc.), the first etf was only launched about 30 years ago (i.e. SPY 0.00 )

  • active vs. passive

    • mutual funds are traditionally run by an active manager, making frequent buy and sell actions in an effort to play the market accordingly

    • etf’s are designed to follow a particular index in the market (not just the s&p500 - QQQ 0.00 follows the nasdaq index)

 

💰 i am team etf

  • vanguard’s VOO 0.00 (etf) and vfiax (mutual fund) do the exact same thing, but the etf has a slightly lower annual fee since it’s passively managed without much frequent human effort

    • imo: why not pay less fees for investing your money into an etf that does the exact same thing as a mutual fund?

  • vfiax requires a much higher initial minimum investment (aka $3k). a share of voo is less than $360 as of writing

    • saving your money early into the s&p500 will have a worldly difference in the amount of returns you’ll have years down the road

    • i don’t like that people have to wait till they save up $3k to get a foot in the door for most mutual funds

 


💡 something im thinking about

portable mini bonfires yo! waiting for my first one to come…!


all of this is just one ape’s thoughts, but I would love to hear what you want to know about! happy trading!

 

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as always, i am no financial advisor! (i am no substitute for professional financial services)
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🦧 mutual fund vs etf
www.wiseape.fyi
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