4. What Are Mutual Funds and ETFs?

Jun 20, 2023

Discover the ins and outs of mutual funds and ETFs as the hosts break down their key differences and management styles. Learn about the various types of funds, from Target Date Funds to specialized options. Get enlightened on the meaning of 'beating the market' and the role of beta as a volatility metric. Plus, uncover practical tips about fees, minimum investments, and how to maximize your returns. And don't forget the cautionary advice about keeping your money active instead of sidelined in a Money Market!

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INSIGHT

What A Mutual Fund Actually Is

A mutual fund is a professionally managed basket of securities that pools investors' money for diversification.
Jess Inskip explains funds combine stocks, bonds, and cash to generate returns for investors.

INSIGHT

Primary Trading Difference

ETFs trade on exchanges like stocks and have intra-day price changes while mutual funds price once daily via NAV.
Jess Inskip highlights ETFs trade on the secondary market and mutual funds do not.

ADVICE

Check Expense Ratios First

Compare expense ratios to decide between active and passive funds since active managers cost more.
Jess Inskip advises passive index funds mirror benchmarks and charge lower fees.

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In Episode 4 of the Market MakeHer Podcast, Jess Inskip teaches us what mutual funds and exchange traded funds (ETFs) are and how they work - and whew - we learned a lot! If you couldn’t take notes while you listened, don’t worry - Jess wrote an article to help explain it in the Episode Equity for the Episode 4 page of the site and Jessie took notes, which can be found in the Dividends section of the site.

Here are some things we learned in Episode 04:

The differences between mutual funds and ETFs
Active vs Passive
You can’t just buy the whole S&P 500, but you can buy a mirror of it
Allll the types of funds that are out there (including Target Date Funds - yes, we will do a retirement episode!)
Stocks are securities, but securities are so much more than stock (i.e. Stocks, Bonds, Funds, Money Markets - oh my!)
Portfolios are like an easter egg basket analogy
Mutual Funds are like a group gift analogy (Bonds are “IOUs” - duh)
Mutual Fund ticker symbols always has 5 letters and ends in "X"
Jessie’s light bulb moment about Primary vs Secondary Markets
Fees Fees Fees! (we also need to do an entire episode about taxes)
How Mutual Funds and ETFs could make you money
“The Greeks” and what Beta means - definitely marinating on this one
How often Jessie says "like" - all the time apparently

Bonus Tip: Don't leave your money sitting in a Money Market in your Brokerage Account! You have to take that money and then invest it in stocks, ETFs, Mutual Funds, etc.

There was also a surprise pop-in visit from Darling Lady Darla, which you can enjoy on our YouTube channel.

As always, you can send us any questions you have about Mutual Funds, ETFs, or anything about the Stock Market at www.marketmakeherpodcast.com/contact-us or on any of our social channels. We are keeping them all organized to be answered in the appropriate episode. And PRETTY PLEASE, if you’re learning something from these episodes - share with your friends, leave us a review, subscribe - you know the deal. <3

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Market MakeHer is an investing education podcast taught by a 15-year finance expert to her friend, a beginner investor. Our mission is to demystify the stock market and make financial literacy accessible to all self-directed investors! We teach complex investing topics in a different way - from "Her" perspective.

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