Index Funds vs. Mutual Funds | Phil Town

In this video, I discuss the differences between index funds (also known as exchange-traded funds) and mutual funds, and whether or not they can be a helpful addition to your financial portfolio.

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[TheMonkWay]

*The biggest difference being the fees. Picking a low fee index fund like VOO will save you hundreds of thousands over a life time compared to a 1% or 2% fee mutual fund.*

[playarf]

"time to go play". yeah ok. for majority of working professionals (NOT finance guys who dont sit and stare at stocks for a living) index funds is the best strategy since it is unlikely that long term any hedge fund or specific stock with out perform an index fund. secondly, the benefits of low fees and commissions and taxes add to this difference.

[Hypedhitman]

Thanks for another great video Phil. Merry Christmas !

[PositiveInvesting]

Main difference I'd say is that ETF's are traded like stocks - you can buy/sell during market hours like a regular stocks, and have lower fees than Mutual Funds. Mutual Funds can only be traded at the end of the day (it executes after market close), and need a few days to settle/go through. Also typically have higher fees.

-Nicholas J. Paris - Stock Market videos weekly!

[TLazyScope]

My professor would be so happy I'm watching this in my free time.

[sku]

The difference. The distinction between active and passive funds is fairly simple. Active funds employ analysts and managers to hunt for hot stocks and bonds. Index funds merely buy and hold the stocks or bonds in an underlying market gauge like the Standard & Poor's 500 index or Dow Jones industrial average.
Last year, a Morningstar study found that "actively managed funds have generally underperformed their passive counterparts especially over longer time horizons, and experienced higher mortality rates – that is many were merged or closed." Higher fees were the chief drag on active fund performance, Morningstar concluded, echoing many previous studies.

[tektraxm]

The correct comparison is Mutual Funds vs Exchange Traded Funds (ETF) --- those are the two investment fund types. Either of these funds can track a specific index (S&P 500 index, Russell 2000 index, World index, etc), which you would categorize as an "index fund". Other categories of funds would be technology, healthcare, utilities, energy, etc).

[mrgoats]

Holy crap this was some passive aggressive sales bullshit.

[dadirama]

he explained very good what is the difference between index and mutual funds..thanks

[UrielX]

Index funds are not always ETFs. Plenty of index mutual funds.

[eyobmichael]

what is the difference between mutual funds and index funds?

[xxxs]

90 percent of mutual funds underperform index funds after fees

[ashleysilverman]

Clears up that an index like SPY is a better investment than mutual funds (the fee's) and ETF's yet you can't get out of it if it drops and becomes iliquid.

[LaughinLoneStar]

So, a high fee mutual fund propaganda video is at the top of youtube on this subject.

[allandelossantos]

What Is better for long term index fund or mutaul fund?

[trejoable]

Where can invest where it will bring revenue in short time, even if is risky anyone?

[bjkarana]

While most people should promptly ignore Phil's advice and just buy an index fund for their retirement, Phil is correct about the drawbacks of index funds. Said drawbacks are mostly with how the underlying indices are weighted, but also with certain index funds' tax liabilities if a major selloff were to occur. However, considering that the tax liability part is a non-issue in a IRA or 401k, most people should probably just buy a low cost index fund because they have low turnover and very low fees compared to even the most conservative active funds out there, and also considering that most ordinary people do not have the time or temperament to actively select stocks on their own.

[stevehanak]

What a shock that an advisor doesn’t like Index Funds

[liamcoins]

"The mutual fund industry has been built, in a sense, on witchcraft" John C Bogle
As to your closing remarks, i do not "Play" I invest.

[BlackMenAreDope]

I’m lost. I thought an index fund was a TYPE of Mutual fund.