ETFs versus mutual funds: Which might fit you better?
Learn how these popular investment options compare on things like cost, flexibility and ease of investing.
CIBC Investor’s Edge
Jun. 17, 2026
3-minute read
ETFs and mutual funds both allow investors to buy a diversified basket of investments with a single purchase. They can both provide exposure to stocks, bonds or other assets — without having to build a portfolio one investment at a time.
While they share some similarities, there are a few important differences in how they work, how they’re priced and how investors typically use them.
| Feature |
Mutual funds |
ETFs |
| Trading |
Bought and sold at end-of-day pricing (NAV) |
Traded throughout the day on exchanges |
| Management style |
Active or passive |
Active or passive ― many are passive |
| Fees |
Generally higher fees, may include sales charges |
Generally lower fees, though trading commissions may apply |
| Minimum investment |
May require a minimum investment |
Can be purchased one share at a time |
| Tax efficiency |
Generally lower |
Generally higher |
Which one might be right for you?
Mutual funds may suit you if:
- You prefer a more hands-off approach
- You’re investing regularly through automatic contributions
- You’re comfortable paying higher fees for professional management
ETFs may suit you if:
- You want lower fees
- You want the flexibility to trade throughout the day
- You prefer to take a more direct role in your investment decisions
You don’t necessarily have to choose one or the other. Some investors use a mix of both, depending on their goals, investing style and preferences.
What matters most is understanding how each option works — and choosing the approach that fits how you want to invest.
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