juststartinout,You wrote, Age is mid 40s. Investment goal is to grow capital as much as possible with medium to high risk tolerance. What is the difference between standard mutual funds and etfs.Wow. Mid-40's. I'm 47. I'd hardly consider myself to be just starting out. I hate hearing about people that are just starting to save for retirement when they're my age.BTW, the fact that you don't have a lot saved up probably doesn't mean you should have a high risk tolerance. What a high risk tolerance really means is that you're willing to work longer if things don't pan out.And the fact that you would ask such a basic question tells me that you have a lot of self-education ahead of you before you start making any sophisticated investment decisions.However unlike other posters here, I think you are probably ideal for a Target Retirement fund. But you still need to educate yourself about mutual funds and ETFs. While this isn't definitive, I'll give you a quick primer.Mutual Fund - An investment company, trust or other investment vehicle that issues shares and buys a pool of investments on behalf of it's shareholders.Open-ended Mutual Fund - A type of Mutual Fund that can issue and redeem shares on-demand. Shares are bought and sold based on a NAV price published by the fund at the end of the day. However, orders for fund shares must be made earlier in the day before the market closes and the NAV is known. An open-ended mutual fund has to purchase and sell assets on a regular basis, which can skew performance relative to it's underlying investments.NAV - Short for "Net Asset Value". Usually refers the market value of the fund's assets divided by the number of outstanding shares.Close-ended Fund (aka CEF) - This type of investment company arranges initial private financing to purchase a fixed pool of assets. The company then issues an IPO on a public exchange and shares can be bought through most any stock broker. CEFs only expand through mergers or secondary IPOs. CEFs do not necessarily trade at NAV - they trade on an open exchange which can set a price above (a premium to) or below (a discount from) NAV. It does this usually because of market sentiment ... something that can be wrong, but often is not.ETFs - This is short for Exchange-Traded Fund. Technically this covers CEFs as well; but most ETFs use a type of arbitrage scheme that allows them to create and redeem shares by swapping shares for a pre-defined basket of investments. Large investment firms do these arbitrage swaps in an effort to make a small profit on the exchange.ETNs - Exchange-Traded Note. This can be functionally similar to other ETFs; but has some structural differences. In this case, the note is a debt security (like a bond) issued by an investment firm or trust. Essentially it's an exchange-traded bond. The value of the bond depends on market conditions, the value of underlying securities and/or the terms of any coupon associated with the Note. ETNs are more common with funds that hold other debt or futures contracts; but for most investors, the difference between an ETF and ETN is immaterial.Now that I've really confused you, go search the internet (or at least old TMF articles) and do some independent reading before you come back and ask questions.- Joel
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