Investing Insights

Active ETFs vs Mutual Funds: What to Know Before Picking a New Fund

Jan 17, 2025

Russ Kinnel is the Director of Ratings for Morningstar Research Services, specializing in fund comparisons, while Matthew Dolgin is a Senior Equity Analyst offering insights on Netflix's stock. They dive deep into the differences between actively managed ETFs and mutual funds, highlighting advantages like lower fees and tax efficiency. Dolgin also shares his analysis of Netflix’s future profit potential, exploring its sports streaming strategy and advertising opportunities, crucial for navigating a competitive market.

17:34

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Episode guests

Matthew Dolgin

Russ Kinnel

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Episode notes

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Quick takeaways

Active ETFs provide trading flexibility and potential tax advantages, making them attractive to day traders over traditional open-end funds.

Netflix's expansion into sports broadcasting highlights its strategy to diversify content, but profitability in this area remains uncertain due to competitive benchmarks.

Deep dives

Understanding Active ETFs vs. Open-End Funds

Active ETFs and open-end funds share several similarities, such as offering diversified portfolios and being managed by the same fund companies. However, they differ primarily in their tax advantages and cost structures. Active ETFs often have lower fees, do not distribute capital gains, and allow for minute-to-minute trading, making them more appealing to day traders. This trading flexibility and daily transparency can attract investors who are active in the market, whereas long-term investors might prioritize stability over immediacy.

Intro

2min

Navigating Active ETFs vs. Mutual Funds

7min

Netflix's Sports Streaming Strategy

4min

Exploring Netflix's Future Growth Strategies Amid Changing Market Trends

3min

Conclusion and Upcoming Investment Conference Announcement

2min

Russ Kinnel, director of ratings for Morningstar Research Services, compares open-end funds and actively managed ETFs from Fidelity, T. Rowe Price, and Capital Group. Matthew Dolgin, senior equity analyst for Morningstar Research Services, discusses what he thinks of Netflix’s stock and where the streamer could profit next.

Open-End Funds vs. Active ETFs

Advantages of Active ETFs

Appeal for Day Traders

Disadvantage of Active ETFs

Which Investors Should Consider Swapping Mutual Funds for ETF Counterparts

Comparing Open-End Funds and Active ETFs on Key Factors

How T. Rowe Price Funds Compare to ETFs

Fidelity Funds vs ETFs Performance

Capital Group’s Different Approach to Their Funds vs ETFs

Decision Expected From SEC on ETF Share Class Requests

What’s New in the Markets

Netflix's Message to Competitors