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Mutual fund, ETF or Index fund?

Funds basics: part 2

There are mainly four main types of funds. These are mutual funds, exchange-traded funds or ETFs, index funds, and hedge funds. We will learn how these three funds are similar and how they differ from each other. I think it is good to know their characteristics because often people don’t know the distinction and use them interchangeably.

What are funds?

A fund is a collection of money from many investors. This pool of money can be invested in stocks, bonds, in a specific sector, or a combination of them. The main advantage of investing in a fund is the diversification it provides to us by spreading our risk.