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LOL! · 03-12-2008, 01:10 PM

The link to Rick Ferri's missive on this is good.

You should be aware that ETFs trade at a premium or discount to the NAV. You can get the NAV by using the open-end mutual fund. Though the purchase/exit fee exists for VEIEX and not VWO, you will likely find that a premium for VWO exists in the same 0.25% range. Also, there is the bid/ask spread of the ETF that does not exist for the open-end mutual fund.

With free trades, there is no contest between the ETF and the open-end mutual fund if you are happy with an integral number of shares of the ETF. If you wish to invest say $2,000 with no leftovers, then the fund is good choice.

I use ETFs for equity funds and open-end mutual funds for fixed income funds because my fixed income funds are in tax-advantaged accounts and I don't want to deal with dividend-reinvestment and fractional shares of the ETFs.

03-12-2008, 01:10 PM	#5
LOL! Thinks s/he gets paid by the post Join Date: Jun 2005 Posts: 3,080	The link to Rick Ferri's missive on this is good. You should be aware that ETFs trade at a premium or discount to the NAV. You can get the NAV by using the open-end mutual fund. Though the purchase/exit fee exists for VEIEX and not VWO, you will likely find that a premium for VWO exists in the same 0.25% range. Also, there is the bid/ask spread of the ETF that does not exist for the open-end mutual fund. With free trades, there is no contest between the ETF and the open-end mutual fund if you are happy with an integral number of shares of the ETF. If you wish to invest say $2,000 with no leftovers, then the fund is good choice. I use ETFs for equity funds and open-end mutual funds for fixed income funds because my fixed income funds are in tax-advantaged accounts and I don't want to deal with dividend-reinvestment and fractional shares of the ETFs.