Exchange-traded funds, also referred to as ETFs, are similar to mutual funds as both instruments bundle together securities to offer investors diversified portfolios, yet, the two investment types have significant differences.

ETFs trade throughout the trading day, like a normal stock, while mutual funds trade only at the end of the day. Most ETFs track a particular index and therefore typically have lower operating expenses than Funds.

The tax treatment of funds and ETFs may also differ. For more details, please refer to your personal tax advisor.

The type of unit you hold determines how any income generated from the fund's underlying investments is treated. 

With income units, income is paid out to fund holders as cash. This could provide the investor with an income stream or the cash could be reinvested to buy additional units. 

With accumulation units income is retained within the fund and reinvested, increasing the price of the units. Generally, for investors who wish to reinvest income, accumulation units offer a more convenient and cost-effective way of doing so. 

Funds are priced based on the value of their underlying holdings, and unlike shares, funds are usually traded once per day. 

Most funds will calculate and publish a price every working day, and that valuation point is typically referred to as a ‘cut-off’. 

At this time the fund manager will calculate the value per unit based on the value of the underlying investments. This is the price at which units are bought and sold and it reflects the accurate value of underlying investments at the time. This means that you will not know the exact price that you will buy or sell at when you place the deal. 

Requesting a trade means the order is held until the next valuation point.