Illustrative stock photo: Pexels · Free-use licence Legally Insightful · Australian explainer Quick answer: ETFs and traditional managed funds both pool investor money. An ETF usually trades on an exchange during market hours, while many unlisted managed funds accept applications and withdrawals using unit-pricing processes rather than exchange trading. Investment wrapper is not the investment strategy Both formats can hold shares, bonds or other assets. Both may be actively or passively managed. An index ETF and an actively managed unlisted fund differ in strategy as well as how units are bought; the labels do not guarantee the same investment outcome. The main comparison should start with what each fund actually owns and its objectives. Two diversified balanced funds may be more alike than two ETFs with completely different investment exposures. Liquidity and pricing processes differ ETF units have intraday market prices, with brokerage and bid–ask spreads. An unlisted fund ...