Trading flexibility
ETFs trade on major stock exchanges around the world. When you buy or sell an ETF, you do so at the prevailing share price at that moment in the marketplace. Mutual fund purchases and sales, in contrast, are processed at the end of each trading day, based on their net asset value (NAV). Therefore, there is a risk that the mutual fund price can change between the time you decide to purchase or sell it, and the time at which the end-of-day net asset value (NAV) is calculated by the mutual fund.
ETFs are also designed to trade close to their underlying net assets value. This provides greater assurance that the price of the ETF will reflect the value of the underlying assets, although in certain market conditions this may not be the case.
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