Mutual Funds Vs. ETFs: What's The Difference?

A key component to smart investing is ensuring that your investments are diversified. Diversifying your portfolio incorporates a variety of different asset classes to reduce the volatility of your portfolio overtime. Mutual funds and exchange-traded stocks (ETFs) both serve this purpose while having unique features that differentiate them.  Mutual funds have been around since 1924 while ETFs launched in 1993. A main component that separates the two is how they are traded. Mutual funds can only be purchased at the end of each trading day.