Many young or novice investors may have heard about exchange-traded funds (ETFs) or mutual funds and are wondering which may be the better option. Here are some things to keep in mind when deciding between the two investing options. First, typical mutual funds are actively managed rather than passively tracking an index, which can be an advantage. Many mutual funds also may require a minimum investment, but many brokers now offer commission-free ETFs. Generally speaking, ETFs are more tax-efficient and more liquid than mutual funds, which is also something young investors should weigh.