What is the difference between ETFs and Closed End Funds?
Sometimes the two are confused since they both sell on stock exchanges. An ETF follows a designated index or benchmark very closely and can grow or shrink with investor flows. A closed end fund tries to beat a target index by actively selecting individual stocks and may deviate significantly from the index. Closed end funds are closed to new money, so investors buy and sell shares on the open market. ETF management fees tend to be far cheaper.
Related Questions
- What other funds in the current plan lineup are closed to new investors? Will any of the closed funds be available to participants who invest in the new self-directed mutual fund window?
- How do closed end funds differ from exchange traded funds (ETFs)?
- What is the difference between ETFs and Closed End Funds?
