First of all, it needs to be said that mutual funds and exchange traded funds (ETFs) are collective investment vehicles which are in many jurisdictions regulated within the same regulatory framework. This means both kinds of products are different ways to deliver an investment strategy to the investor. The key differences between a mutual fund and an ETF are related to their product structure, buying and selling of shares, transparency, and fees and expenses: 1. Buying and Selling of Shares The shares of mutual funds are normally bought and sold only once a day, at the fund’s net asset value

The words benchmark and index are often used as synonyms in the financial language. Generally speaking, this seems to be right, but there are some differences between an index and a benchmark that every investor needs to know, since a benchmark is not necessarily the same as an index. An index, especially for securities markets, is a key figure that expresses the development of the prices for the respective securities over time. With regard to this, it indicates the basic trend in a capital market. This means an index serves as an indicator of the state of a market or

In discussions about whether active or passive funds are the better choice for an investor, performance statistics are often used to show that active management is a loser’s game, since the majority of active managers are not able to beat their benchmark after costs. Although this argument is probably right and despite the fact some active managers are able to produce consistently superior returns, this headline view doesn’t give all the reasons to prefer one fund over another. From my point of view it is important to look beyond the headline numbers to understand if one investment vehicle has a