2006•Palgrave Macmillan UK eBooksRequires access

Exchange-Traded Funds versus Mutual Funds — Weighting the Options

Aboubaker Seddik Meziani

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Abstract

As an outgrowth of the index fund industry, ETFs now provide investors with practical alternatives to mutual funds. Just like mutual funds, they were developed around the same benchmarks, some of which were described in Chapter 2. The SPDR 500 or SPY is an ETF that attempts to track the S&P 500 index in the same way as the Vanguard 500 index fund. Hence, the ETF educational process, the theme of this book, leads to an inevitable comparison between these two investment categories. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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What this paper is about

As an outgrowth of the index fund industry, ETFs now provide investors with practical alternatives to mutual funds. Just like mutual funds, they were developed around the same benchmarks, some of which were described in Chapter 2. The SPDR 500 or SPY is an ETF that attempts to track the S&P 500 index in the same way as the Vanguard 500 index fund. Hence, the ETF educational process, the theme of this book, leads to an inevitable comparison between these two investment categories. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Available abstract

As an outgrowth of the index fund industry, ETFs now provide investors with practical alternatives to mutual funds. Just like mutual funds, they were developed around the same benchmarks, some of which were described in Chapter 2. The SPDR 500 or SPY is an ETF that attempts to track the S&P 500 index in the same way as the Vanguard 500 index fund. Hence, the ETF educational process, the theme of this book, leads to an inevitable comparison between these two investment categories. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Key concepts: Index fund, Vanguard, Fund of funds, Passive management, Index (typography), Closed-end fund, Mutual fund, Open-end fund

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