I'm still trying to wrap my head around ETFs. They seem similar to mutual funds, but they can be traded any time while the markets are open, right? Also, supposedly they are supposed to have lower costs, but when I compare the expense ratios of FELC (0.18%) to FSPGX (0.035%), both of which are large cap funds, that doesn't seem like the ETF has a lower cost.

What are good ETFs to get for long term investing? Are they actually better than mutual funds or even just index funds?

Any advice would be appreciated.

This is a perfect q for AI, like ChatGPT, Grok, etc.. They will give you a more detailed answer than you'll get here.

I didn't know the answer and I copied and posted your q into ChatGPT. It was very informative.

Waffledynamics said:

---

I'm still trying to wrap my head around ETFs. They seem similar to mutual funds, but they can be traded any time while the markets are open, right? Also, supposedly they are supposed to have lower costs, but when I compare the expense ratios of FELC (0.18%) to FSPGX (0.035%), both of which are large cap funds, that doesn't seem like the ETF has a lower cost.

What are good ETFs to get for long term investing? Are they actually better than mutual funds or even just index funds?

Any advice would be appreciated.

---

VANGUARD ETFs

thank me later!

I also use the SPDR ETFs

https://www.sectorspdrs.com/

Do you recommend any particular Vanguard ETFs? I'd like to look at them in comparison to Fidelity ETFs.

I will take a look at those. Thanks!

Am I missing something here? Those don't look like they've performed all that well and/or they have high expense ratios. Can you clarify how those have been good for you?

Waffledynamics said:

---

Am I missing something here? Those don't look like they've performed all that well and/or they have high expense ratios. Can you clarify how those have been good for you?

---

If you are looking for broad market indexes, look at Vanguard, Schwab, and Fidelity versions of the index you're trying to benchmark against (such as the S&P 500 or Nasdaq 100). They should all have really low expense ratios, and should meet your needs. Pick the one you like the best.

Waffledynamics said:

---

Am I missing something here? Those don't look like they've performed all that well and/or they have high expense ratios. Can you clarify how those have been good for you?

---

Annual returns - i've only been in these personally for about a year. I have a professional FA who invests 3/4 of my stuff. This is just me a investing stuff in a small bit of what I own. I am a laywer but I have no expertise in financials. This is not professional advice, just what I am doing. A lot of this is to give some diversity because the individual stocks I pick are mostly tech stocks, trying to hit a home run. If I beat inflation, I'm good. The rest is a bonus.

The largest chunk of my personal (not with FA) money is in mutual fund VFIAX - 1 year 21 %, 3 year 23%. 5 year 18%. Hard to beat that.

These are my ETFs for a little diversity and exposure in other stuff.

FCG is natural gas. 1 is 1.35% 3 year is 4.1%. I don't have a lot in it. Not good but I'm sticking in it.

JEPQ is Nasdaq 1 year 17% 3 year 24%

PXE energy exploration 1 year 2% 3 year 5 % not that great but don't have much in it. Speculative

PXI energy 1 year 10% 3 year 8 % not bad

QTUM Quantum computing 68% 1 year hey hey. I don't have a lot in it.

SCHD is a dividend ETF 1 year 1 % but 3 year 11% - I wanted some in dividend stocks.

ETF's have a very similar structure to a mutual fund except a mutual fund has a team of active managers behind it picking and choosing what's in the fund and what isn't. An ETF has no active managers, you're just simply owning every company within a certain index, sector, or subsector of the market. This is why the cost of ETF's are so much cheaper than mutual funds.

The goal of a mutual fund (these days) is to beat whatever index of a similar concept that they would be compared to net of their additional management cost.

The majority of them can't do it consistently enough to make it worth the additional cost, hince why ETF's have become way more popular and why the mutual fund companies are scrambling to introduce more and more "Active ETF's"



There's a whole other conversion about the tax efficiency of ETF's vs MFD's in non qualified accounts

Plus 1 vote for VTI. Simple, effective. If you don't want to overthink it, just start with that.

Some people will bring up VOO. They both perform close to one another

Baby Billy said:

---

ETF's have a very similar structure to a mutual fund except a mutual fund has a team of active managers behind it picking and choosing what's in the fund and what isn't. An ETF has no active managers, you're just simply owning every company within a certain index, sector, or subsector of the market. This is why the cost of ETF's are so much cheaper than mutual funds.

---

Can you provide examples where the bolded statement is true? I don't know if I am looking at things wrong, but I have not found an ETF with a lower expense ratio than its comparable mutual fund, at least from what I can tell.

VTI total market
SPY s&p500
QQQ nasdaq
IWM small caps
DIA Dow jones

Not much more you need than those.

The tax implications between the two are pretty different.

AgOutsideAustin said:

---

One ETF and one only.

Vanguard VTI

I retired early because of it and will own it until I'm in a box.

---

I also have VTI

El Chupacabra said:

---

VTI total market
SPY s&p500
QQQ nasdaq
IWM small caps
DIA Dow jones

Not much more you need than those.

---

Agree

although I have so much of the individual MAG 7 and adjacent that I have trimmed my QQQ since I own the underlying companies.

also XLI, XLE, XLF

Just pick an S&P 500 fund like VOO and consistently put money in there every month. Do this consistently for 10 years through the ups and the downs and you will be very well off by then.

Dont worry about the differences between ETF's and Mutual funds, theres not much difference between the two. Just pick one and stick with it.