Does Robinhood Offer Mutual Funds? (ETFs?)


Does Robinhood Offer Mutual Funds? (ETFs?)

Last updated on September 4th, 2022 at 10:09 pm

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Robinhood provides an excellent investing experience, sporting an intuitive UI and commission-free trading. However, you might wonder what exactly you can buy and sell on Robinhood. 

Robinhood App For Beginners - Pros...
Robinhood App For Beginners - Pros & Cons And How It Compares

Specifically, which kinds of index funds can you find on the platform?

Robinhood does not offer any mutual funds on its platform as of 2021. However, they have a solid selection of ETFs, stocks, and options contracts available for trading. 

While Robinhood lacks mutual funds, they’re still an excellent platform for new investors since they don’t charge commission fees. This means you can easily buy ETFs (exchange traded funds) on their platform which work a lot like mutual funds. 

Next, I will dive into everything you should know about index fund availability on Robinhood. In addition, this article covers some of the other securities Robinhood does and doesn’t have. 

That way, you can save time and start making money faster.

Index Funds On Robinhood

Index funds primarily come in two forms: mutual funds and ETFs.

Robinhood, as of 2021, doesn’t offer any mutual funds on its platforms. And there currently is no timeline on when or if they’re planning on providing mutual funds as an investment. 

The lack of these mutual funds is one of Robinhood’s weakest points as a platform. Many of their competitors offer various mutuals, with some of them even being fee-free.

However, Robinhood does offer trading on numerous ETFs

As of this article’s writing, the list of ETFs on the app is 2,000+ strong.

Additionally, they don’t charge any fees for buying ETFs or other securities. This is also part of the reason they don’t offer mutual funds.

If you didn’t know, many mutual funds come with various transaction fees and minimum buy-ins. These fees would be antithetical to Robinhood’s image of feeless trading. 

And if they did cover those fees that mutual funds charge, it would just be more money out of Robinhood’s pocket.

How To Trade ETFs On Robinhood

Ready to buy ETFs on Robinhood and wondering how you can do so?

I got you covered. Below are the steps for how to find and trade ETFs on the Robinhood app:

  1. Log in to your Robinhood app (or create an account if you don’t have one.) 
  1. From your home screen, select the magnifying glass at the bottom of the screen.
  1. You should now be at the “Browse” screen. Click on the search bar at the top.
  1. In the field, type in “ETF.” A tab with a green icon should appear under the search bar saying “ETFs.”
  1. Click on the “ETFs” tab.
  1. You’ll now see a list of ETFs. Choose the one you want to trade.
  1. On the ETF’s screen, select “trade” and choose your transaction type.

Voila! That’s how you find and trade ETFs on Robinhood.

You can also select various subcategories from the list of ETFs. These include things like bond ETFs, regional funds, and even currency index funds.

Just make sure to do your research before going in on any investments.

Brokers And Apps That Offer Mutual Funds

Unfortunately, Robinhood doesn’t offer any mutual funds. But that doesn’t mean other brokers can’t or don’t offer them. 

In fact, the company seems to be the odd duck out when it comes to mutual funds.

Here are some other brokers that offer mutual funds. Keep in mind the selection of funds available (and fees applied) vary between brokerages:

  • Fidelity
  • Vanguard
  • Charles Schwab
  • J.P. Morgan
  • TD Ameritrade
  • Ally
  • Interactive Brokers

Some of these brokers will charge a fee to trade mutual funds. But still, it’s nice to have the option to exchange them at all.

Many of these other brokers also offer more overall options when it comes to tradable securities. We’ll go more into that later.

Does Robinhood Offer Bonds?

The answer is both “yes” and “no.”

Allow me to explain:

Robinhood doesn’t give you the option to trade bonds on the market as individual assets. However, Robinhood does have ETFs. And among those ETFs, there are bond ETFs you can trade.

You can trade bonds on Robinhood through bond ETFs, but you can’t buy and sell bonds independently. So your bond options are restricted to those grouped through index funds.

As a result, Robinhood isn’t a great platform if you’re primarily interested in bonds.

Other Investments You Can (And Can’t) Make On Robinhood

Mutual funds aren’t available on Robinhood, but ETFs are? 

It’s a little confusing figuring out what is and isn’t available on Robinhood. So we made it a little easier for you by showing what you can and can’t trade on Robinhood.

Here’s what investors can trade on Robinhood:

  • ETFs
  • Stocks
  • Options contracts
  • ADRs
  • Some cryptocurrencies

That doesn’t look so bad until you see what Robinhood doesn’t have.

Below are the securities and functions that the platform lacks:

  • Mutual funds
  • Bonds
  • Stock that trade on foreign exchanges
  • Foreign-domiciled stocks
  • Select OTC equities
  • Preferred stocks
  • Royalty Trusts
  • Fixed-income trading
  • Units
  • Closed-end funds

Many would argue that Robinhood has its competitors beat when it comes to ease of use and accessibility.

Unfortunately, they’re lacking a lot of securities that you can trade on other platforms.

Is It A Good Idea To Trade Index Funds on Robinhood?

Even if Robinhood is lacking in overall offerings, their selection of ETFs is strong.

If you’re okay not trading mutual funds on the platform, Robinhood can be a great way for you to trade ETFs. Plus, you could always open a second trading account to acquire mutual funds with one of the brokers I listed earlier.

ETFs are more popular than ever before, especially with young investors.

They’re a solid option if you dislike playing with fire and prefer watching your funds steadily grow over time (hopefully) 

While some of them are volatile, they’re overall more insulated from risks than individual stocks. This safety mainly comes from the fact that many ETFs are already diversified baskets of investments.

ETFs aren’t needle movers like some of the famous ‘meme’ stocks are. Still, they’re a solid investment and a staple in many traders’ portfolios.

Final Thoughts

Investing in ETFs and stocks is straightforward on Robinhood, thanks to their sleek and accessible UI. However, they don’t offer mutual funds on the platform. 

Furthermore, they have a smaller selection of securities to trade than most of their major competitors.

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