What are the benefits of ETFs over Mutual funds?

Hoenir

Do read the Key Investor Information Document (KIID) for the ETF . Whilst the headline charges appear low. Beneath the surface other charges do apply which are executed in the price during the daily trading session. 

Linton

You can switch ETFs in a few minutes.  With a mutual fund it could a few days.

There are of course benefits on the Mutual side so choose which best matches your needs.

GeoffTF

cubewealth said:

You’ve made some solid points! It’s true that mutual funds are traded twice a day and are covered by the FSCS, which is a plus for security.

As for ETFs, they offer some benefits you might find interesting. They usually have lower expense ratios, which can save you money over time. Also, ETFs are traded on exchanges, so you can buy and sell them throughout the day, giving you more flexibility. Plus, they tend to be more tax-efficient, which might help you keep more of your gains.

While mutual funds can be a great choice, especially if you prefer not to pay the trading fee, ETFs could be worthwhile if you’re looking for lower costs and more trading flexibility.

Mutual funds (i.e. OEICs and Unit Trusts) are traded once a day in the UK. ETFs are not more tax efficient in the UK. Some platforms do not charge a fee for trading ETFs. In the UK, most platforms charge a hefty percentage fee for holding mutual funds, but nothing for holding ETFs (or cap that charge).

MX5huggy

As said you don’t have to pay the £7 for buying ETF’s 

On Vanguard you can’t buy bits of ETF units so if you’re investing £50 a month you would only buy units of VEVE which are about £80 every other month where as with alternatives you can buy “bits” of units. 

GeoffTF

MX5huggy said:

As said you don’t have to pay the £7 for buying ETF’s 

On Vanguard you can’t buy bits of ETF units so if you’re investing £50 a month you would only buy units of VEVE which are about £80 every other month where as with alternatives you can buy “bits” of units. 

It is possible to buy fractional shares with some other platforms.

https://moneytothemasses.com/saving-for-your-future/investing/what-are-fractional-shares-and-where-best-to-buy-them

Albermarle

cubewealth said:

You’ve made some solid points! It’s true that mutual funds are traded twice a day and are covered by the FSCS, which is a plus for security.

As for ETFs, they offer some benefits you might find interesting. They usually have lower expense ratios, which can save you money over time. Also, ETFs are traded on exchanges, so you can buy and sell them throughout the day, giving you more flexibility. Plus, they tend to be more tax-efficient, which might help you keep more of your gains.

While mutual funds can be a great choice, especially if you prefer not to pay the trading fee, ETFs could be worthwhile if you’re looking for lower costs and more trading flexibility.

Strange first post to an old thread. AI generated ?

masonic

Albermarle said:

Strange first post to an old thread. AI generated ?

Username just happens to match a commercial website with some red flags. I didn't hesitate to reach for the spam button.