ETF vs Mutual Funds: Which one should you choose and why?

ETF vs Mutual Funds: There is no dearth of options when it comes to investment. ETFs (Exchange Traded Funds) and mutual funds are two good investment options, but the real question is, which one is better for you? Let's find out.

ETF trades like stocks and lets you buy or sell anytime during market hours. But mutual funds can be bought or sold at the end of the day at the NAV price.

ETFs have a lower expense ratio but may have brokerage charges. Contrary to this, mutual funds may have higher expense ratios and, at times, have an exit load.

ETF is managed passively as it tracks an index and is, therefore, less risky. On the other hand, mutual fund is actively managed by professionals.

ETF is good for DIY or 'do it yourself" investors. But mutual fund investors prefer expert management.

ETFs are more tax efficient, while mutual funds are less tax efficient.

ETFs offer more targeted investments, while mutual funds provide more diversification.

While ETFs offer more targeted investments, mutual funds offer diversification and good for long-term investment.