| Definition |
A pooled investment vehicle managed by professionals, investing in various assets. |
A fund that tracks an index, commodity, or sector and is traded like a stock on exchanges. |
| Trading |
Can only be bought or sold at NAV (Net Asset Value) at the end of the trading day. |
Traded throughout the day on stock exchanges like regular stocks. |
| Pricing |
NAV is calculated once daily after market close. |
Prices fluctuate during the day based on market demand and supply. |
| Liquidity |
Lower liquidity; orders are processed once daily. |
High liquidity; can be bought or sold instantly on the exchange. |
| Management Style |
Can be actively or passively managed. |
Mostly passively managed to replicate an index. |
| Expense Ratio |
Generally higher due to active management fees. |
Lower expense ratio as they are passively managed. |
| Minimum Investment |
Often has a minimum investment requirement (e.g., ₹500 or more). |
No minimum; can buy even one unit like a stock. |
| Trading Platform |
Purchased directly from AMC or via brokers/distributors. |
Traded on stock exchanges via demat account. |
| Entry/Exit Load |
May have entry or exit load depending on fund type. |
No entry/exit load, but brokerage fees may apply. |
| Real-time Pricing |
Not available; based on day-end NAV. |
Real-time pricing available like stocks. |
| Dividend Reinvestment |
Option to reinvest dividends or receive as payout. |
Usually dividends are paid out; reinvestment depends on investor action. |
| Transparency |
Portfolio disclosed monthly or quarterly. |
Holdings disclosed daily. |
| Suitability |
Ideal for SIPs and long-term investment goals. |
Preferred by active traders and low-cost investors. |
| Taxation |
Same as ETFs; depends on type (equity or debt). |
Same as mutual funds; taxed based on asset class. |
| NAV Tracking |
Exactly matches NAV at redemption. |
May trade at a slight premium or discount to NAV. |
| Flexibility |
Less flexible; cannot set intraday prices. |
Highly flexible; allows intraday trades and limit orders. |
| Systematic Plans |
SIPs and SWPs are easily available. |
SIPs not available directly, but possible via brokers or apps. |
| Demat Requirement |
Not required; can be held in folio form. |
Mandatory to have a demat and trading account. |
| Tracking Error |
Depends on fund management and NAV calculation. |
May have slight tracking error depending on liquidity. |
| Example |
SBI Bluechip Fund, HDFC Balanced Advantage Fund. |
Nippon India Nifty 50 ETF, ICICI Prudential Gold ETF. |
| Popularity |
Popular with retail investors and SIP users. |
Gaining popularity among informed and cost-conscious investors. |
mutual fund vs etf