BOBOT
Recycles dryer sheets
- Joined
- Aug 17, 2006
- Messages
- 480
I have a couple of etfs because I wanted targeted index exposure to specific areas of the globe & couldn't find it in the mutual fund offerings - at least not at VG.
Other than that sort of consideration I don't understand the attraction of index etf's compared to their mf counterparts. If a total stock index etf, for example, and mutual fund have essentially the same portfolio and expense ratio, why would a buy-and-holder opt for the etf? I've read that the drag on mf's from frequent trading are passed to the remaining shareholders whereas with etf's they're borne by the trader, but many or most index mf's have a restriction on frequent trading anyway, so I don't know how that's a problem.
ANyway, why would you opt for an broad index etf over a comparable mutual fund?
Other than that sort of consideration I don't understand the attraction of index etf's compared to their mf counterparts. If a total stock index etf, for example, and mutual fund have essentially the same portfolio and expense ratio, why would a buy-and-holder opt for the etf? I've read that the drag on mf's from frequent trading are passed to the remaining shareholders whereas with etf's they're borne by the trader, but many or most index mf's have a restriction on frequent trading anyway, so I don't know how that's a problem.
ANyway, why would you opt for an broad index etf over a comparable mutual fund?