As the name suggests, ETFs are funds that are traded on exchanges like NSE, BSE. ETFs like mutual funds invests in stocks , bonds, gold . A very basic question arises is that how are they different from mutual funds? Let's Understand. One difference between mutual fund and ETF is the ability to buy/sell. For a mutual fund, you might need to wait for (T+2) days to get the allocated mutual fund and (T+3) days to sell the mutual funds where T is the day you execute the order of buy/sell. This does not give you immediate liquidity from your investment and also you are not aware of the exact buying and selling price. Whereas ETFs are like any other stock that is traded on exchange and you know the buy price as well as the sell price. Also, you can buy/sell immediately in seconds. Though this is a advantage of ETF, the climax on why ETFs can disrupt the mutual funds needs you to know the difference between Active & Passive Funds. Active
