differences between mutual funds and ETFs Well, if an investor chooses to invest in an index fund there are a number of different vehicles that could be used firstly there are collective investment trusts which make up a large portion of black rocks 401K offerings including the highly rated Target date funds known as the life path funds. Also, there are separately managed accounts, which allow for more client customization. Finally the two most well known types, which are mutual funds and ETFs. For both of these investment vehicles the aim of the fund will be to track the performance of the index. However, there are a number of differences between the structures. Firstly index mutual funds are the same as any other mutual fund in that to invest in a mutual fund and investor buys the shares in the mutual fund from the fund management company, which means there is no secondary Market over which to trade this investment with other investors. If you want to sell your investment, you need to set it back to the fund management company itself. There is typically only one price calculated per day for the value of the mutual fund shares and only one point per day when you could trade those shares. These features are the same for both Collective investment trusts and mutual funds in contrast to this exchange traded funds or ETFs operate much more like the ordinary shares of any other listed company such as apple or Ford the shares are tradable between investors on a regulated exchange at any point through the trading day and have an ongoing market value published in real time by The Exchange the rules for the minimum investment amount are set by mutual funds and Collective Investment Trust themselves, but for ETFs you could trade As little as one share index mutual funds and Collective Investment Trust typically offer more widely accepted asset classes whereas ETFs tend to offer a much wider range of indexes. Finally ETFs are required to publish the assets that they hold on a daily basis while mutual funds are typically required to disclose the assets that they hold on a coarsely basis, but can provide this detailed daily Collective investment trusts only disclose their Holdings the investors in the fund.