How costs of ETFs and index funds stack up

If you are one of those investors who prefer to invest in a low-cost and diversified portfolio and do not want to take the risk of fund managers’ wrong calls affecting your investments, passive funds are the right choice for you. Within the passive fund basket, there is a choice between index funds and exchange-traded funds (ETFs). Both types of funds hold portfolios that replicate the index that they track. But there are many subtle differences between the two categories that you should understand before choosing to invest in one.

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