Exchange-traded funds (ETF) are great investment vehicles compared to the traditional mutual funds for three key reasons. The reasons are: transparency in timely reporting of the securities they hold; ease of buying and selling throughout a trading day just as with a stock, rather than reconciled at 6 or 7 p.m. like a mutual fund; and cost-effectiveness, since management fees for ETFs are typically much lower than for mutual funds.
The ETF provider which has done the most to emphasize this third advantage of cost-effectiveness is Vanguard.
Vanguard generally claims lower ETF expense ratios than its peers, aided by tapping tax-management strategies that normally are only used by conventional index funds. Additionally, Vanguard brokers will trade Vanguard ETFs commission-free.
Read more about this streamlined ETF provider at Eagle Daily Investor.