San Diego Housing Market News and Analysis
Index/mutual funds versus ETF/spdr
User Forum Topic
Submitted by flu on November 9, 2012 - 7:11am
In the past, people have traditionally favored mutual funds/index funds versus ETFs for various reasons.
I'm curious what's your take on the entire ETF versus mutual funds (if you had to chose between the two)...
Pros for funds:
1. Generally lower cost per unit cost
Cons for funds:
I'm just thinking that while funds generally have been good in the past, the inability to enter and exit the fund quickly makes them sort of more dinosaurs of today, when market volatility is implied. Also, before ETF's cost considerably more due to the transaction costs associated with buying/selling stocks from a brokerage. But it seems like most brokerages have such a cheap commission rate, this becomes a moot point...
For example, selling a position in an S&P index fund traditionally doesn't complete until the close of a business day...And once sold, often times companies have a 90 day window before you can buy back into the fund... On the other hand an S&P index ETF can be exchanged immediately (subject to brokerage commission)....
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