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Investing foundations

Lesson 58 · Written for kid, teen, and little

Mutual Funds vs ETFs

A mutual fund pools money into investments and is normally priced once a day.

The idea

A mutual fund is a big shared basket. Lots of people put money in together, and the fund buys investments such as stocks or bonds. Everyone owns a share of the fund. An ETF is a fund too, but you buy and sell it on the stock exchange while the market is open; a mutual fund is normally priced once a day after the market closes. Broad funds can spread your money across many investments, while other funds are more concentrated. Neither can promise your money will grow. 🧺

A

Words to know

5

Mutual fund

A shared basket where many people's money buys many companies at once. Your $50 and a thousand other people's $50 buy the same basket.

ETF

Exchange-traded fund. A basket you can buy or sell during the trading day, like a stock.

Share

One slice of the basket. Buy more shares and you own a bigger slice — 10 shares is twice as much as 5.

NAV

Net asset value — the one price per share a mutual fund sets after the market closes each day. Unlike a stock, it does not move minute to minute.

Minimum

The smallest amount some funds let you put in to start, like $500 or $1,000.

Try it — no accountSort into groups

Both are baskets of many companies, but they work a little differently.

Sort each clue into the right column.

0 / 6 sorted

In the full lesson

  1. 1Sort into groups
  2. 2Work out the number
  3. 3Make the call

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

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