What is an ETF vs. an index?
The most notable difference between an exchange-traded fund and index funds is, as the name suggests, in the way they are traded. Namely, ETFs are traded throughout the day on stock exchanges. We've explained how to invest in index funds, but we didn't mention that index funds are only traded once a day, after markets close. This difference can affect how you pay taxes on your investment, as well as the fees you pay.