Management

Index funds are passively managed, while mutual funds are actively managed. 

1

Investment objective

Investment objective: Index funds seek market-average returns, while mutual funds aim to outperform the market.

2

Cost

 Index funds have lower fees than mutual funds.

3

Transparency

Index funds are more transparent than mutual funds.

4

Predictability 

Index fund performance is relatively predictable, while active mutual fund performance tends to be less so.

5

Diversification 

Index funds offer broad-based diversification.

6

Lower risk

Index funds have lower risk compared to actively managed mutual funds.

7

Higher returns

Over a long-enough period, investors might have a better shot at achieving higher returns with an index fund.

8

Ease of use

Index funds are easy to use and require minimal maintenance.

9

Tax efficiency

Index funds are more tax-efficient than mutual funds.

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