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Is it better to invest in an index fund or an ETF? What is the difference?

The key difference is that ETFs are available on the exchanges on real time Net Asset Value basis

By OLM Desk

Is it better to invest in an index fund or an exchange-traded fund (ETF)? What is the difference?

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An ETF is made up of a basket of stocks of a particular index like the Sensex or Nifty. The portfolio of index funds also replicates stock exchange indices. But the key difference is that ETFs are available on the exchanges on real time Net Asset Value (NAV) basis. Index funds are bought and sold by the AMC at the end of the day's NAV. Investing through an SIP is one of the key benefits of index funds.

 

olmdesk@outlookindia.com

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