ETF guide

ETF vs Mutual Fund: Cost, Liquidity, and Return Comparison

ETFs and mutual funds can both provide diversified exposure, but their costs, execution, and pricing mechanics are different.

Pricing difference

Mutual funds are usually transacted at NAV, while ETFs trade on exchanges during market hours. ETF prices can trade at a premium or discount to NAV.

Cost difference

Both can have expense ratios, but ETFs also involve bid-ask spreads and brokerage. Mutual funds may have exit loads or regular-vs-direct plan differences.

Which calculators help

Use ETF cost calculators for spreads and expenses, and mutual fund calculators for SIP, SWP, XIRR, expense ratio, and tax planning.