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Is it better to buy ETFs or index mutual funds if the underlying index is the same?

Answer

If two funds track the same index at a similar expense ratio, your long-term returns will be nearly identical, so the choice comes down to mechanics and preference. ETFs trade all day, often have slightly lower minimums, allow fractional-share dollar investing at many brokers, and can be marginally more tax-efficient in taxable accounts because of how they handle capital gains. Index mutual funds make automatic dollar-based recurring investing and reinvestment effortless and price once daily, which suits set-and-forget savers. In a 401(k) you'll typically only have mutual fund options anyway. There's no universally right answer; pick the vehicle that your broker automates best and that you'll actually stick with. Don't overthink it or hold both versions of the same index, which just creates redundancy.

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