Originally Posted by ksr
Do you take other factors into consideration, such as the ability to buy/sell an ETF at a specified price throughout the day?
I'd appreciate any thoughts on this. Thanks.
Keep in mind that I might go with an index fund's lower expense ratio rather than with an ETF. But I've usually been able to find an ETF at a competitive expense ratio to its index-fund equivalent.
A couple other reasons to go with ETFs:
- The passive ETF won't deviate from its index. So far tracking error has been a good thing at Vanguard but I wonder how long Gus Sauter & team can keep up the magic. Just my personal bias, not trolling for a defense.
- No short-term trading fees or penalties. No idea if this is an issue at all fund companies.
- The ability to short and to trade options.
Another personal bias is that brokerages (trading ETFs) seem to be more customer-oriented than mutual-fund companies. When you sell a mutual fund you're selling it back to the company through their rules and their procedures. (If "fair value" is invoked then it's even at their price.) When you sell an ETF you're selling it to anyone else, with the brokerage's rules/procedures, and sometimes at your price (limit or options).
Every time I've had to bitch at a company about trading my shares it's been in regard to a mutual fund. Even when I've bitched at Fidelity (which we've used for nearly 25 years) it's been about their mutual funds and not about their ETFs or stocks. I've never had to bitch at a brokerage about an ETF trade.