ETF vs Mutual Fund: Which Should You Own?

Both wrappers hold baskets of securities. The differences are structural rather than philosophical.

Key differences

• ETFs trade intraday; mutual funds price once at market close

• ETFs are usually more tax-efficient in taxable accounts thanks to in-kind redemptions

• Mutual funds allow exact dollar purchases and automatic investing everywhere

Practical guidance

In a taxable account, ETFs usually have the edge. Inside an IRA or 401(k), the tax difference disappears and convenience wins.