What’s the difference between ETFs and mutual funds?

Investing introduces a seemingly endless array of options. Often, funds are touted as a great way to avoid fully committing to any one investment, as they allow you to own a diverse group of assets with just one purchase. But even when you go to look at investment fund options, you’ll find that there are a myriad to choose from.

Two of the most common you will likely come across are ETFs, or exchange-traded funds, and mutual funds. But how do they differ, and how can you know which one is the right fit for your portfolio?