While making a comparison between ETF’s and the mutual fund investment, the first point that goes in favor of ETF’s is that it’s not time bounded. Time bounded in sense you can trade them at any hour of the day. If you see that market is crashing, you can instantly sell them in the market and get out of the possible crunch. On the contrary, in case of mutual funds if you want to sell them at noon, you would only be capable of getting the price of next day.

Instant balancing of your portfolio

Business markets and economies are always subjected to changes. If you feel like making a shuffle in your investment portfolio, it is very easy to do with ETF’s. Unlike mutual funds investment, you can change your investment priorities only by a couple of clicks. On the other hand, had you been stuck in mutual fund investment, you might have to call your managing company and would only be capable of making the desired adjustment after paying a number of extra fees and penalties.

Focus of attention of big investors

Due to the complexity and risk involved with mutual fund investment, not only individual and small investors, but the big institutions too are taking ETF’s as good investing option. The reasons of the phenomena are quite simple, ETF’s are cheap, liquid, and it is far easier to understand them.

Transparency

It has always been almost impossible for most of the investors to get to know that what is going on inside the mutual fund investment. The only time when there is some possibility to have any idea regarding what happened when is the time when quarterly reports are made available. on the contrary, the ETF’s performance can be analyzed on daily basis. This shows how an investment in ETF’s is transparent and easy to understand.

Entry and exit without conditions

Mutual funds usually carry conditions and one must need to follow them if one is interested in investing them. Either there is a minimum level to be looked over or commitments regarding making regular investments. If one does not follow these conditions, one has to face certain penalties. In case of ETF’s, one is not obliged to bear any such conditionality.

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