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What is the difference between a mutual fund and an ETF?
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A mutual fund is a pooled investment vehicle that allows investors to pool their money together with other investors in order to buy securities such as stocks, bonds, and other financial instruments. An exchange-traded fund (ETF) is similar to a mutual fund in that it is an investment vehicle that allows investors to buy shares of an underlying asset, but an ETF trades on a stock exchange just like any other security. ETFs are typically more liquid than mutual funds since they trade on an exchange, which means you can sell or redeem your shares quickly without having to wait for a fund manager to execute a transaction.