Mutual fund / ETF

Pooled investment vehicles that can hold stocks, bonds or other assets. In the U.S., open-end mutual fund transactions generally use the next calculated net asset value (NAV), while retail ETF shares trade on exchanges at intraday market prices.

Mutual fund / ETF in practice

Hypothetical: a retail investor buys ETF shares during an open trading session and later sells them that afternoon at an available market price. A U.S. open-end mutual fund redemption instead uses the next calculated NAV, typically at day end. Execution and cash settlement are separate; neither seconds-to-execute nor instant cash availability is guaranteed.

Scroll horizontally to read all columns.

U.S. retail transaction comparison
VehicleTransaction pricing
Open-end mutual fundNext calculated NAV, typically at day end; applicable charges
ETFIntraday exchange market price; may differ from NAV

Source: SEC Investor.gov: Mutual fund and ETF characteristics.

Institutional investor · Retail investor · Alternative assets · Illiquidity discount · All of the glossary