Investing
Investment Funds
Understand how mutual funds and ETFs pool investments, how they differ, and what to consider before investing.
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Funds in 30 seconds
An investment fund pools money into a collection of investments. A fund may hold many assets, one asset class, several asset classes, or a concentrated strategy—so it is not automatically diversified or low risk.
Two common structures
Mutual funds and ETFs
Mutual funds
Pooled investments managed according to a stated objective. Investors purchase or redeem units through the fund or dealer process, and fees and costs apply.
Exchange-traded funds (ETFs)
Funds whose units generally trade on a stock exchange during market hours. They may hold many kinds of assets; costs and risk depend on the product and strategy.
At a glance
Mutual fund versus ETF
| Feature | Mutual fund | ETF |
|---|---|---|
| Trading method | Purchased or redeemed through the applicable fund/dealer process | Generally trades on an exchange |
| Pricing | Typically based on net asset value under the fund’s process | Market price changes during trading hours |
| Management style | Can use different strategies | Can use different strategies |
| Costs | May include management, operating, sales, or account costs | May include management, operating, trading, commission, or account costs |
Investment approach
Active versus passive
Active
A manager makes investment selections according to the fund’s objective and strategy.
Passive / index-tracking
The strategy attempts to track a benchmark or index rather than select investments to outperform it.
Mutual fund does not automatically mean active, and ETF does not automatically mean passive. Both structures can use different management approaches.
Costs reduce returns
Fees still matter
Depending on the fund, platform, and account, costs may include management fees, operating expenses, trading costs, commissions, sales charges, or account fees. Review the current disclosure documents for the actual structure.
AvailableUnderstand Investment FeesLook under the hood
Know what the fund actually owns
Two funds can have very different holdings, risks, geographic exposure, sectors, asset classes, fees, and objectives.
Fund A
Stocks only
Fund B
Bonds only
Fund C
Stocks + bonds
All are “funds,” but they can behave very differently.
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Sources & last reviewed
Official references
- Last reviewed
- August 2026
- Primary sources
- Ontario Securities Commission investor education