Nancy Graham CPA, CA, CIM, CFP, TEP

Portfolio Manager
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What’s the Verdict: ETF or Mutual Fund?

February 9, 2017 - 0 comments

When I get questions about ETFs (which I often do these days), I find there’s often a “question behind the question.” What people are often really asking is whether ETFs – a fast-growing and increasingly popular choice – are an inherently better choice than those “old-fashioned” mutual funds. Some investors are so enamored by ETFs that they reach this verdict without ever weighing the preponderance of the evidence.

Before you reject mutual funds outright, it’s worth taking the time to consider both fund structures. For either or both, there are some essential features and functions worth insisting on every time – as well as some “gotchas” to avoid. For an impartial discussion about the advantages and disadvantages of each, check out today’s “No Dumb Questions” video.


Bottom line? Whether you’re looking at a mutual fund, an exchange-traded fund or any other investment vehicle, start with this key question: Will buying, selling or holding this investment contribute to or detract from my smart investment strategy?

In other words, which investment will best support your ability to:
(1) Focus on balancing market risks and expected rewards according to your personal goals
(2) Fanatically eliminate any unnecessary costs involved
(3) Remain true to your carefully crafted financial plan

If a fund is the best choice for doing all of the above, does it really matter if it’s a mutual fund or an ETF? Check out my video to find out more about why I believe the answer is: “No, it does not.” While you’re at it, send me more of your investment questions, and keep an eye on my YouTube channel for more “No Dumb Question” discussions.

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