When Mutual Funds Beat ETFs
Brokerage fees, lack of active offerings can tip the scales.
Question: What are the drawbacks/disadvantages of owning ETFs over conventional mutual funds?
Answer: For some investors, exchange-traded funds have become the investment vehicle of choice. The explosive growth of ETFs over the past decade--U.S. ETFs added $241 billion in net assets in 2014 alone, lifting their total net assets to $2 trillion--can largely be attributed to advantages that ETFs offer as compared with traditional open-end mutual funds.
Adam Zoll does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.