ETFs and index funds are very closely related, however there are subtle differences between them that confuse most investors. My research shows that ETFs and index funds tracking major indexes tend to have very similar performances. ✅ SUBSCRIBE, NEVER MISS A VIDEO! ✅ 💙 https://www.youtube.com/channel/UCznq6ylMgT_OMp_iO5OZGyw ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ ✅ REFRENCES ✅ 📚 Compare mutual funds and ETFs https://personal.vanguard.com/us/faces/JSP/Funds/Compare/CompareEntryContent.jsp ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ ✅ CHECK OUT MY OTHER VIDEOS ✅ 🟡 Best Bitcoin Trading Advice [in 2021]: Stay Away from Cryptos 💙 https://youtu.be/F3F7QJTR4ck 🟡 Economic Deflation: How It Can Have Serious Negative Implications 💙 https://youtu.be/KyQTfCII0aA 🟡 Bitcoin & Governments [#1 Reason] Politicians are Opposed to Cryptocurrencies 💙 https://youtu.be/aeIOTeYDkPw 🟡 Vanguard is Still the Leader in Low-cost Mutual Fund Investing 💙 https://youtu.be/LrO35v7jAe0 🟡 Fake Financial Experts: Similarities Between Financial Gurus and Religious Gurus 💙 https://youtu.be/BQfqjUj6NTM ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ #etf #etfs #index #vanguard #fund #mutualfund #mutualfunds ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ ✅ About this video ✅ An index fund is essentially a large pool of money collected from investors which is managed by professionals to track a specific list of securities such as stocks of the S&P 500 companies. When you invest in an index fund, your money is added to the pool managed by the investment firm such as Vanguard. In this scenario, Vanguard will take care of managing the fund and ensuring that it tracks the index in exchange for a management fee that they charge annually. Exchange Traded Funds (ETFs) are created based on the same concept which is to track a specific list of securities, but they are implemented differently. In this case, an investment firm such as Vanguard creates a fund by purchasing the securities listed on the index. Then, Vanguard splits the fund into smaller chunks so to speak and starts to sell them to investors on stock exchanges. In other words when you are buying a share of an ETF you're buying a small portion of the fund that Vanguard has created using the process I just explained. Hidden Costs Associated with ETFs and index funds: Both ETFs and index funds can be very cheap to own from an expense ratio perspective. The expense ratio or the management fee is the annual amount the investment firm, in our case Vanguard, will charge you to manage the fund. These fees are explicitly called out on the prospectus of the ETF or index fund. However, management fees are not the only costs that affect the performance of ETFs and index funds. There are other costs associated with running a fund that are not captured under management fees. For instance, consider the cost of rebalancing the funds. The main takeaway here is that there are many types of expenses not reported as part of the management fee. These costs affect the performance of ETFs and index funds differently and there is no easy way for investors to estimate their impact. The only way we can analyze the impact of these costs is by simply looking at the historical performance of similar ETFs and index funds side by side. ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ ✅ About this channel ✅ Hi everyone! My name is Hamed Dadgour and I am excited to see that you are interested in my content. Financial Intelligence seeks to deliver best in class educational material in subjects related to personal finance, retirement, investing and financial freedom. Our main goal is to create engaging videos to communicate somehow complex financial matters in a simple to understand manner. We advocate for long term investing strategies. Short-term trading strategies and get-rich-quick-schemes are dangerous trends that are taking the financial world by storm. Our goal to provide sound and level-headed recommendations. This channel is particularly targeted towards individuals seeking a breadth of knowledge across a variety of financial disciplines. The range of topics I plan to discuss on this channel are value investing, financial freedom, mutual funds, index investing, monetary policies, inflation and other related economic topics. Welcome to the channel and please subscribe! ▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬▬ ✅ Timestamps ✅ 0:30 Intro 1:37 Part 1: Introduction to index funds and ETFs 3:05 Part 2: Hidden costs of index funds and ETFs 5:12 Part 3: Comparing index funds and ETFs