How is an ETF different from a tracker (mutual) fund?

ETFs are very similar to tracker funds in that they are both a great way to get broad exposure to a market through a single investment. ETFs, however, are often seen as a modern version of a tracker fund. Here are the main differences:

  1. Wider choice. From tracking single indexes such as the FTSE 100 to global themes such as clean energy, ETFs offer a wider range of options for investors to choose from. 
  2. ETFs are also more transparent so you can always view the underlying investments. Tracker funds, on the other hand, typically only release their holdings monthly. 
  3. ETFs trade throughout the day which means you can invest in and out of them more quickly. Tracker funds typically only trade once per day, so it takes longer to buy and sell them. Please note Moneybox does not currently offer live ETF trading.
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All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest.

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