This is an interesting article from David Landis of Kipplinger that talks about the advantages and disadvantages of ETF vs No Load Index Funds. It seems the mutual fund industry is feeling some competition from the etf industry and accordingly has dropped fees on their indexed products. ETF's still have many advantages, but the article does have some interesting points.
"With the numbers so close, you'll have to weigh other factors to determine the better choice. The downside for ETFs is that, because they trade like stocks, you must pay a commission each time you trade. By contrast, you can buy or sell the Fidelity funds without paying commission. A plus for ETFs is that you can trade them any time the market is open. You can generally buy and sell regular funds just once a day, and fund companies discourage frequent trading.
High initial minimums also argue against regular funds. Fidelity requires $10,000 to invest in its Spartan line -- although the index-fund leader, Vanguard (800-635-1511), lets you in with just $3,000 (its Vanguard 500 Index charges 0.18% per year). Minimums are lower for retirement accounts. But you can buy as little as one ETF share at the going rate (recently $119 for the S&P ETFs), plus brokerage costs."
Kiplinger.com - are ETF's Still Right For You?
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