The right trade off

For investors, exchange traded fund shares (ETFs) present an alternative way to invest in index mutual funds. After their introduction in Europe in 2001, ETFs have gained increased acceptance and use by the investment community. While there may be important legal and regulatory differences, the relative attractiveness of conventional fund shares and ETFs generally depends on a few simple qualitative and quantitative considerations. While the qualitative considerations focus on the investor's required level of trading flexibility, the primary quantitative consideration is cost, which is a...