The Exchange. The Expense Ratio. Ninety-four billion dollars is invested in self-directed IRA accounts, where many people choose to exercise the freedom of this retirement account and put their money into stocks and bonds themselves instead of using mutual funds. Investors like index funds because they offer immediate diversification. ETFs, like a passively managed mutual fund, attempt to track an index, often by the use of computers, and are also intended to mimic the market.