While investing in general always involves a certain level of risk, both mutual funds and ETFs have approximately the same level. It depends on the individual mutual fund and the ETF you're investing in. In terms of security, neither the investment fund nor the ETF are safer than the other because of their structure. Security is determined by what the fund itself has, such as an IRA Gold account. Stocks tend to be riskier than bonds, and corporate bonds carry slightly greater risk than U.S.
bonds. However, higher risk (especially if diversified) can bring greater returns in the long term. Most ETFs are quite safe because most of them are index funds. An index ETF is simply a fund that invests in exactly the same securities as a given index, such as the S&P 500, and tries to match the index's return every year.
While all investments involve risks and index funds are exposed to total market volatility, meaning that if the index loses value, the fund follows suit, the general trend of the stock market is upward. Over time, indices are more likely to gain value, so do the ETFs that track them. A big difference to consider is the share price of the funds. Since ETFs are bought and sold on a stock exchange, market forces dictate the value of the fund itself.
If there is significant demand for the fund, it may have a price higher than its net net asset value, which is the underlying value of the securities held by the fund. This may be important if the ETF is held in a taxable account and not in a tax-advantaged retirement account, such as an IRA or 401 (k).
