Why would I ever invest in an actively managed fund when they never outperform the mkt. Like the fees and tax impacts of actively managed funds are ridiculous and not worth the returns.

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Boomers like mutual funds because they need someone to hold their hand and they don’t trust computers.

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Same opinion here. Active investment will never die, but I expect it to become a much smaller percent of trading.

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Mutual funds allow automated purchases, whereas ETF’s don’t. Probably viewed as a pro for those who are hands-off/“set it and forget it” types

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Vanguard has some mutual funds that are really just ETFs restructured, I’ve owned them on and off over the years for automatic investing.

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I always wondered this same thing. Like how and why are mutual funds still around?

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Even if your brokerage doesn’t support fractional ETF shares, it’s really besides the point of this post. Passive index funds and ETFs are mostly identical in performance. Actively managed funds or ETFs are the comparison in this context.

Buying fractional shares is a relatively minor factor, just as the ability to buy ETFs instantly vs. historically only being able to buy mutual funds based on the daily close is also a minor thing, unless you are day trading.

Active vs. passive should not be conflated with mutual fund vs. ETF.

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Investments for those who are influenced by marketing.

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I think ETF can be considered a managed fund as well, it is not a distinction between mutual and ETF. You do pay fees on ETFs.

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I'm thinking of passive etfs tracking an index which is representative of its market like Vanguard S&P 500 etf vs a mutual fund that's actively being managed/has regular trading at discretion of the manager . On expenses, .04% for passive vs ~2% for active (not counting stcg taxes or trading fees) is a crazy difference.

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Low fee passive Mutual Fund tracking an index VS. a low fee passive ETF tracking the same index. Which is better and why?

Very little difference now.

One is that mutual funds are often traded only once per day, so you can’t day trade them and catch an intraday high/low, and since ETFs are traded like stocks, you can trade them “real time”.

Another is that most passive no load mutual funds have no trading commission for buying or selling, but ETFs can have trading commissions. However, many brokerages like Vanguard don’t charge trading commissions for their own ETFs, so in many cases it is no different.

There can be small differences in the annual expense ratios, but for a comparable Vanguard ETF and mutual fund, they are usually about the same.

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