Both index funds and ETFs track market indices (S&P 500, NASDAQ), but key differences exist:
| Feature | Index Funds | ETFs |
|---|---|---|
| Trading | End-of-day pricing | Real-time (like stocks) |
| Fees | Higher expense ratios | Generally lower |
| Minimum Investment | Often $1K+ | Share price (~$50-$500) |
Best For:
- Hands-Off Investors → Index funds (set & forget).
- Active Traders → ETFs (flexibility, intraday trading).
Verdict: Both are great—ETFs suit traders; index funds suit long-term holders.
