ETF vs Mutual Fund: What's the Difference?
ETFs (exchange-traded funds) and mutual funds both pool investors' money into a diversified basket of securities, but they're bought, sold, and priced differently.
How they trade
An ETF trades on a stock exchange throughout the day, just like a share — its price moves in real time and you buy or sell it through a broker at the live market price. A mutual fund is bought and sold directly with the fund house at the day's NAV, calculated once after market close.
Cost and structure
ETFs are usually passively managed (tracking an index) with low expense ratios. Mutual funds can be active or passive; active funds charge more. Buying an ETF needs a demat and trading account; a mutual fund can be bought without one.
Which to choose
ETFs suit those who want intraday flexibility and the lowest costs; mutual funds (especially via SIP) suit disciplined, hands-off investing. Both report holdings and NAV — see how to access fund data via API.