Folio investors own company stocks directly. This means that Folio investors are entitled to vote on issues affecting the company. Professional vs. individual management . Mutual funds are managed by fund managers. Funds usually employ a staff of analysts and researchers who sift through stocks looking for the best investments, and they charge an array of fees for providing this service.
Fund managers trade stocks on behalf of their funds' investors.
Folios, on the other hand, are managed by advisors themselves, who have complete control over which stocks to include in Folios. They can buy and sell stocks on behalf of clients. Taxable distributions vs. control . Clients have little control over the taxes that stem from their mutual fund distributions. They also decide whether to own stocks that pay dividends.