The nearly century-old mutual fund and its more modern relative, the exchange traded fund (ETF) are both investment vehicles made up of a diversified portfolio of securities. You can buy shares of these funds through brokerages or other providers, thereby having a financial stake in many companies at once.
Differences in how each type of fund is structured, traded, and taxed can make one or the other a better fit, depending on your investing preferences and style. The best way to determine which type of fund suits you is to learn about them and how they work.
