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INVESTING 101 · Lesson 16

Index funds vs ETFs: are they actually different?

Daily Desk · Editorial5 min read
Same building. Different lobbies. Different tax bills.

Both index mutual funds and index ETFs can track the exact same index. Vanguard's VFIAX mutual fund and Vanguard's VOO ETF, for example, both follow the S&P 500. The portfolio inside is essentially identical. What differs is how shares are bought, sold, and taxed.

— Educational, not financial advice.