ETFs vs index mutual funds

Capital at risk. All financial investments involve an element of risk. Therefore, the value of your investment and the income from it will vary and your initial investment amount cannot be guaranteed.

 


 ETFsIndex Mutual Funds
Seek to deliver the return of the index they are tracking after fees  Green tick  Blue tick
Automatically provide exposure to the returns of a large number of securities
  Green tick  Blue tick
Seek to diversify risk as they are less dependent on a single company  Green tick  Blue tick
Generally have low fees  Green tick  Blue tick
Traded on regulated stock exchanges – such as the London Stock Exchange  Green tick  
Bought or sold on fund platforms too but are not traded on exchanges    Blue tick
Generally when investors are investing they are buying from, and selling to, other investors  Green tick  
Investor is effectively transacting directly with the manager of the fund    Blue tick
Trading can take place throughout the day  Green tick  
Trading takes place once a day Blue tick
Minimum investment of 1 share or even fractional shares in some cases
Green tick

Risks

  • Capital at risk. All financial investments involve an element of risk. Therefore, the value of the investment and the income from it will vary and the initial investment amount cannot be guaranteed.
  • The price of the investments may go up or down and the investor may not get back the amount invested. Your income is not fixed and may fluctuate.
  • The value of investments involving exposure to foreign currencies can be affected by exchange rate movements.
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