What is the Difference Between an ETF and a Mutual Fund?

One of the investment choices that has become increasingly popular in the last few years is the exchange traded fund (ETF). ETFs and mutual funds (including index funds) share some similarities, but there are some very important differences, and these differences explain why ETFs are becoming so popular amongst traders.

ETFs and mutual funds are similar in that the idea is to bundle together different securities. They are set up so that you get instant diversity. Instead of investing in a wide...