Large institutions, like pension funds, and very wealthy private individuals may be able to hire professional money managers directly.  But most of us deal with our money managers through intermediaries.   For a long time  investors had basically one choice, a mutual fund.  For about the past ten years, however, another alternative has been available, the exchange traded fund (ETF).

One topic, three posts

I’m going to talk about ETF vs. mutual fund in three posts.  This one, the first, will talk about the general structure and features of each.  The second will talk about index funds vs. index ETFs, including how both deal with international stocks.  The third will cover actively managed funds vs. actively managed ETFs.

Note that I’ll be talking about funds incorporated in the US. Details will be slightly different in other jurisdictions.   Also, when I say “mutual fund” I mean no-load open-ended mutual funds.  I’ll talk briefly about load mutual funds and closed-end mutual funds/ETFs in part III.

Here goes: Continue reading →