Index Mutual Fund vs ETF?

which is better?
I know ETF have a less Expense ratio.
However the price of the Mutual fund is really the market? right?
Where the ETF could vary from the real market value? right?

If you select carefully, the MF and ETF have about the same charges and tracking accuracy.

I find ETFs much more convenient to buy and sell because you can execute an order at the click of the mouse you see the price you will get, while with MF you have forms to fill. However MF send you better account statements and performance data. I guess there is no clear winner and each will have its adherents.

Lately I've really been liking some of the ETFs. Though there are many no load mutual funds, ETFs trade like stocks so no fees. That means their prices change throughout the day, whereas mutual funds are priced at market close.

Index funds are by far the most diversified way to earn consistent returns over time. And with many different index funds you can do well, particularly if you simply hate to take risk, and your goal is growth or capital preservation. I love them for those reasons.

If you are less risk averse, and have definite beliefs regarding a sector, commodity, industry or whatever, then ETFs can be a lot of fun. No ADR's and no messing around with futures. Indeed, diversity within a single ETF may be limited to diversifying within a sector. In the case of commodities, they may actually be trying to track the spot price of the commodity, or they may be tracking an aspect of the commodity market. An ETF alone will probably tend to be less correlated to a market index. They can be used effectively within a portfolio to hedge or speculate, so basically they can be quite volatile, and yes, the ETF will vary from any market index price.

Choosing between an index fund and an ETF is largely a flip of the coin if your purpose is long term investing, such as for retirement. Index funds and ETFs both tend to have low expenses--and some index funds (like Vanguard's) may have lower expenses than some ETFs. When you buy an ETF, you have to go through a broker and pay a commission. You also are likely to pay the ask price for the ETF, which includes an implicit transactional charge by the dealer selling the ETF. So index funds can sometimes be cheaper than ETFs.

It's true that the price of an ETF can vary from the value of its underlying holdings, for essentially short-term market-based reasons. If you buy and hold an ETF long term, these anomalies aren't likely to matter much. If you trade an ETF short term (not a great idea), you can take unexpected losses. The value of a mutual fund is based on the closing prices of the stocks it holds. So it is the real price as of 4:00 p.m. Eastern Time.

ETFs are cheaper than mutual funds. ETFs have very low annual expenses, nearly 20 basis points or 0.2% less. As against this, actively managed mutual funds show average expenses exceeding 135 basis points (1.35%). This does not include the extra 2% - 5% as loads, 12(b)-1 marketing fees, transactions costs, and soft dollar expenses mutual funds, passed on to you but never informed, except in very fine print that nobody cares to read.
http://debts-to-wealth.com/category/Why-...