Mutual funds are also priced once a day, while ETFs are priced all day allowing for intraday trading. Most of the time, ETFs trade right in line with their NAVs and stray only when there is severe market volatility. [Mutual Funds, Step Aside.]
Also, ETFs are much more tax-efficient than mutual funds, however, ETFs can keep taxes more at bay when it comes time to add up the costs. Passive management, trading on secondary markets and in-kind redemption by authorized participants are ways that ETFs have beat mutual funds. [5 Things to Know About ETFs and Taxes.]
For more stories about mutual funds, visit our mutual fund category.
Tisha Guerrero contributed to this article.