• Print
  • Default text size A
  • Larger text size A
  • Largest text size A

ETFs and Mutual Funds: What to consider

  • By Fidelity Learning Center
  • Facebook.
  • Twitter.
  • LinkedIn.
  • Google Plus
  • Print

Lots of people invest in mutual funds and exchange traded funds, or ETFs for short and, before investing, many of them probably asked themselves – “Which one should I invest in?” “What’s the best choice for my investing needs?”

In this video series, we meet four different individuals who asked these same questions. Each considers different things, and makes a decision to invest in either a mutual fund or an ETF based on their individual needs.

  • Facebook.
  • Twitter.
  • LinkedIn.
  • Google Plus
  • Print

Exchange traded products (ETPs) are subject to market volatility and the risks of their underlying securities which may include the risks associated with investing in smaller companies, foreign securities, commodities and fixed income investments. Foreign securities are subject to interest rate, currency-exchange rate, economic and political risk all of which are magnified in emerging markets. ETPs that target a small universe of securities, such as a specific region or market sector are generally subject to greater market volatility as well as the specific risks associated with that sector, region or other focus. ETPs which use derivatives, leverage, or complex investment strategies are subject to additional risks. The return of an index ETP is usually different from that of the index it tracks because of fees, expenses and tracking error. An ETP may trade at a premium or discount to its Net Asset Value (NAV) (or indicative value in the case of ETNs). The degree of liquidity can vary significantly from one ETP to another and losses may be magnified if no liquid market exists for the ETP's shares when attempting to sell them. Each ETP has a unique risk profile which is detailed in its prospectus, offering circular or similar material, which should be considered carefully when making investment decisions.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information.  Read it carefully.

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. Prior to trading options, please read Characteristics and Risks of Standardized Options, and call 800-343-3548 to be approved for options trading.  Supporting documentation for any claims, if applicable, will be furnished upon request.

Past performance is no guarantee of future results. Current and future portfolio holdings are subject to risk.

Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.

Free commission offer applies to online purchases of select iShares ETFs in a Fidelity account. Fidelity accounts may require minimum balances. The sale of ETFs is subject to an activity assessment fee (of between $0.01 and $0.03 per $1,000 of principal) and, subject to a short-term trading fee by Fidelity if held less than 30 days.

ETFs are subject to market fluctuation and the risks of their underlying investments. ETFs are subject to management fees and other expenses. Unlike mutual funds, ETF shares are bought and sold at market price, which may be higher or lower than their NAV, and are not individually redeemed from the fund.

Margin trading entails greater risk, including but not limited to risk of loss and incurrence of margin interest debt, and is not suitable for all investors. Please assess your financial circumstances and risk tolerance prior to trading on margin. Margin credit is extended by National Financial Services, Member NYSE, SIPC.

©2013 Morningstar, Inc. All rights reserved. The Morningstar information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or redistributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Fidelity does not review the Morningstar data and, for mutual fund performance, you should check the fund's current prospectus for the most up-to-date information concerning applicable loads, fees and expenses.
693482.1.0