Mutual Funds vs Index Funds vs ETFs | Ultimate Guide

Mutual Funds vs Index Funds vs ETFs | This video explains the differences between these 3 investments and the pros and cons toward which ones you should buy! This video uses visual animations to help you better understand Mutual Funds, Index Funds, and ETFs.

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⏰ Timestamps ⏰
00:00 Intro
02:13 Mutual Funds
05:35 Index Funds
09:29 ETFs
10:18 Detailed Summary

📝 What are Investment Funds?
Investment fund in simple terms is a gathering of securities such as stocks or bonds where you as an investor can buy this fund and receive exposure into many securities all within one purchase.

What is a Mutual Fund?
A mutual fund is an actively managed fund that contains securities that are decided upon and managed by a person known as a money manager or fund manager.

What is an Index Fund?
An index fund is a passively managed fund which is a type of mutual fund but instead of being human operated it is by a computer and the algorithm tracks companies that resemble particular markets at a much lower cost.

What is an ETF?
An ETF (Exchange Traded Fund) is a fund that mostly tracks particular indexes, although there are some that are actively managed. The main differences are that an ETF trades similar to an individual stock and also much more tax efficient by the structure of an ETF (For more information on the taxes, let me know in the comments and I will make an in-depth video on it).

In my opinion, Index Funds and ETFs are the way to go. Although some investors believe Mutual Funds are the best, this video explains exactly what you need to know about each and why you may be much more interested in Index Funds and ETFs.

Understanding the differences between these investments is crucial because it can have a significant impact on your retirement.

Don't let time keep passing, let your money work for you. If you found any value in this content please consider hitting the like button and subscribing as I continue spreading the highest quality content related to "money talk" to impact as many lives as possible.

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Disclaimer: The information provided in this video does not, and is not intended to, constitute legal, tax or financial advice; instead, all information, content, and materials available on this video and on this channel are for general informational purposes only. The presenter is not an attorney, accountant or financial advisor. Viewers of this video should contact their attorney, accountant or financial advisor to obtain advice with respect to any particular legal, tax or financial matter.

[DannySully]

The decisions you make now play a huge role for your future. Let me know your thoughts in the comments!
If you gained any value out of this, please consider hitting the like button and subscribing for future "money talk" content!

[marinrodriguez]

One thing you did not mention was the tax implications of investing in mutual funds vs ETFs. I know that you have mentioned these in some of your other videos but maybe a dedicated video about tax advantages and disadvantages of fund/ETF and different retirement accounts. Capital gains and dividend income as well as the type of accounts you have all play a key role in your tax strategy. Keep up the great work!

[WallaceTaylor-pmpn]

Excellent video. Explained the differences clearly.

[angelmendez]

I'm so glad I came across your page! You explain all of this so well, very much appreciated!

[amelia]

had to watch this over and over a few times and then finally take notes to understand lol, but i got it finally! thanks!

[stephlight]

Just found your channel! Great videos! Thank you!

[michaelknight]

I just wanted to add about the fact you don't have capital gain distribution with a ETF like you do with mutual funds and index funds that are held with a pool of investors. Usually Index funds have lower capital gain distributions per year than a mutual fund. These factors don't matter at all if your in a traditional IRA and or Ruth. Other than that, you explain everything very well. Thanks

[Angel-dfoo]

Thank you Danny; know that your work goes a long way in helping the lives of many🙏🏻

[Jen-qbcl]

Hi Danny great clear video. . What are the names of index funds you recommend. Thanks

[christinegallo]

😊 hi I'm new at this and your video is very informative. So I purchased fidelity fxaix sp 500 n bought Vanguards vnq . My question is I'm learning how to buy index finds and etfs. I'm don't want to overlap so should I just do 1 or the other or doing what I'm doing.
Q.2 is I have a roth ira with Betterment and I'm realizing it's only etfs in there. Should I stay with them or go somewhere else where there would be index funds ect.
Thank you so much.

[dandF]

Index funds vs ETFs. Which one is good for Roll IRA, Roth IRA, Individual Account (non-taxable) ? Could you explain regarding capital gain and taxes that you has mentioned in the video ?

[walterlimbacher]

Such a wealth of knowledge you have presented....Many thanks for posting this video.

[PapiJuancho]

Thank you Danny for your work, I’ll always been wanting to get into stocks, index funds etc etc but I get overwhelmed with all the information… this video is very informative and easy to understand, thank you

[wt]

Thanks for the video. What type of account to open on fidelity to be able to invest in idex fund and ETF?
Thanks.

[pratimaroy]

Danny, I love you and your videos! Thank you for this knowledge! God bless u cause u made sense, no one wants to teach us these and everyone is mad secretive and thank you for this

[thepick]

Thanks for the video. I think I understand that ETFs are more liquid than the other two, but vs Index funds not much more? I mean when can you buy and sell index funds?

[nicrules]

wow you broke that down great, learned a lot 🔥

[jnordman]

If you gradually & continually invest in funds, how do you determine when your selling a fund that has been held long-term vs short-term?

[pratimaroy]

Quick question can you buy the target date retirement fund of your age specifically and sp 500 and other muthal funds in the fidelity roth ira?

[ninacarenpataw]

@DannysMoneyTalk, is it ok to share your fidelity portfolio tickers?