Are exchange-traded funds same as index funds?

Question

Are exchange-traded funds same as index funds?

Accepted Answer · 2020-03-24

No. The exchange-traded funds are not the same as index funds. The ETFs are low-cost and tax-efficient investments which invest in stocks, commodities, bonds, etc. directly. However, index funds are very similar to high-cost mutual funds and these are always traded through a fund manager to ensure the functioning is not impacted.

ETFs track the index of a specific exchange while index funds replicate the performance of the benchmark market index.
ETFs are traded like stocks while index funds are treated as mutual funds.
The pricing of ETFs is based on the demand and supply in the market while index funds are purchased on the basis of NAV of the underlying assets.

Are exchange-traded funds same as index funds?

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