Quote:
Originally Posted by Joekerr
Bumping an older thread.
What is everyone's outlook on ETF's vs mutual funds? To me, seems like ETF's with the lower MER are the way to go (along with other factors). Any specific ETF's everyone likes?
Anyone using a robo-advisor - which platform if so?
I'm torn, because I don't think mutual funds are the way to go, but at the same time, I have a decent chunk of change I want to invest but I don't have enough knowledge about ETF's I feel. So I'm debating robo advisor, just because then I can pick a basket that satisfies my risk tolerance, but I don't like the only bank that does robo up here, and I don't know that I trust Wealthsimple and others.
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ETFs trade like stocks, have no load, and typically have cheaper expense ratios. Mutual funds settle at the end of the day so the price only changes once per day, not every second like an ETF or stock. There is nothing wrong with owning them.
For example:
VTI - Vanguard Total Stock Market Index (ETF)
VTSMX - Vanguard Total Stock Market Index (Mutal Fund)
They have identical performance. The only difference is VTI costs 0.04% to own, VTSMX costs 0.15% annually. You can also buy VTI at no commission if you hold it at least 30 days. Essentially a no brainer.
I own both VTSMX and VTI, but I've transitioned over to almost all ETFs. Just easier to buy, cheaper (in some cases), and easier to trade since they are like stocks.
You can enroll in DRIP in both. You cannot buy partial shares of an ETF (as you can in mutual funds) unless it's part of a DRIP. Mutual funds also typically force you to have a minimum amount invested. Now that I wrote all this out, mutual funds are pretty worthless in comparison. Their prices might be a bit more stable in a moment of panic (doesn't matter over time).