By Nellie S. Huang
From Kiplinger’s Personal Finance
When faced with a choice between buying shares in an exchange-traded fund (ETF) and buying shares in a mutual fund that follows a similar strategy, which is the better option for you?
“The choice isn’t always black and white,” says Charles Rotblut, with AAII, which helps individual investors. The answer may depend on several factors, including how you typically trade investments and in what type of account you plan to hold the asset.
ETFs and mutual funds have much in common. Both are easy to trade and offer diversified exposure to a swath of the market in one go. They both pool assets from shareholders and invest in diversified baskets of stocks, bonds or other assets. There are actively managed and index-based strategies in both ETF and mutual fund structures….