What are the differences between ETFs and mutual funds?

ETFs and mutual funds both pool money from many investors to buy a mix of assets, but they differ in how they’re traded and managed. ETFs are traded like stocks on an exchange and their prices fluctuate throughout the day. Mutual funds are priced only once daily after the market closes. ETFs often have lower fees and are usually passively managed, meaning they track an index. Mutual funds can be actively managed, with a professional selecting investments, which may increase costs. ETFs offer more trading flexibility and usually have better tax efficiency. However, mutual funds may be better for automatic investing or retirement accounts. Your choice depends on your strategy, preference for management style, and investment goals.