Description

In this episode of Financial Clarity for Doctors, hosts Corey Janoff and Rachelle Vanderzanden are joined by Zach Kill, CFA® to walk through some of the basics of mutual funds and exchange traded funds (ETFs). They are very similar!  But there are a few differences and pros/cons to both.

Similarities:

• Both are collections of investments purchased with pooled money, usually from many different investors.
• There is generally a stated purpose for the fund. For example, an S&P 500 ETF and mutual fund are both designed to track the performance of the 500 largest publicly traded companies in the U.S.
• Both can be either passively managed (most likely following an index) or actively managed with a management team selecting individual companies to buy and sell.

Differences include:

• The timing of trading and pricing.
  • Mutual funds are generally traded and priced at “Net Asset Value” (NAV) as of the end of the day when the trade was initiated.
  • ETFs can be bought and sold throughout the day, similar to stock trading.
• This can affect things like price and tax efficiency.

There are a few other options that we cover in this episode as well.  Listen to the full episode to learn more, including why any of this even matters.

For more financial planning tips from Corey and Rachelle, find them on social media!
LinkedIn: @CoreyJanoff and @RachelleVanderzanden; Instagram: @CoreyJanoff and @VanderzandenRachelle; and Twitter: @CoreyJanoffCFP and @RachelleFinance 

Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through Registered Representatives of Cambridge Investment Research, Inc., a broker-dealer, member FINRA/SIPC. Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Finity Group, LLC and Cambridge are not affiliated. Cambridge does not offer tax or legal advice.