What is the difference between an ETF and a mutual fund?

ETFs and mutual funds both pool investor money to buy a portfolio of securities. The main difference is how you buy and sell them.

ETFs trade on exchanges during the day, so prices change in real time. Mutual funds are typically bought or sold once per day at the fund's net asset value (NAV).

In real life, the "better" choice often comes down to cost, tax behavior, and convenience. ETFs are portable across brokers and easy to trade, while mutual funds can be great for automatic investing and fractional purchases depending on the platform.