Dividend ETFs and Mutual Funds

Another option for new investors are mutual funds. They are similar to ETFs, with you buying shares of them which are then invested into multiple other companies. However, most of them are actively managed, meaning managers try to “beat the market” by choosing what to buy and sell. This usually results in higher management fees.

In contrast, most ETFs are passively managed, which means they are designed to track an index (like the S&P 500) and simply follow that.  This results in lower management fees.

Source: US Bank