Index fund vs ETFs: Key differences you need to keep in mind while investing

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Feb 02, 2024, 07:02:06 PM IST

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Index fund vs ETFs: All you need to know Index funds are open-ended mutual fund schemes while ETFs are funds traded on the stock exchanges.

Text: Centre for Investment Education and Learning (CIEL)

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Keep this in mind Index funds can be invested in the physical format or the demat format whereas ETFs require a demat account for investment.

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Can you do an SIP in index funds? SIP investments are possible in index funds but not in ETFs.

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For investors An index fund gets a NAV at the end of the day, but the price of an ETF changes in real-time with the market conditions.

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Index funds vs ETFs: Expense ratio Index funds have higher expense ratios as compared to ETFs, but ETFs also have a transaction cost attached both at the time of buying and selling.

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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Index fund vs ETFs: Key differences you need to keep in mind while investing

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