Whether to buy an index fund or ETF depends on the cost of investing in them in addition to their respective performance. From what you said, you will pay roughly 1.36% to buy mutual fund each time. How much will
you pay to buy ETF? In my opinion, choosing the one with lower cost will do more good in the long term.

FYI, i’m living outside US, and currently there’s only 1 Index funds and 2 ETF here. Not much of a choice. But the problem with this only 1 index funds is that there’s this 1% subscription fee everytime i wanted to add more units and 0,36% management fee, 0% redemption fee.

Does this makes ETF a better choice if i had my $2500 on march? Considering that ETF also have buy & sell fee, along with the broker commission fee?

I planned to hold it over long period of time for my retirement plan. I also planned to buy/add more units every month using dollar cost averaging after i make this first initial investment.

I really need some opinions here.
Thank you again!

While ETFs’ expense ratios are relatively lower, you do have to pay commission to buy/sell ETFs as they are traded as stocks and most brokers charge commissions to trade ETFs. If you only have a small amount to invest each time, the commission could hurt you over time
though ETFs themselves are cheapter, unless you use broker like Zecco which doesn’t charge commission. Also you can buy ETF at any time you like, much more flexible than buying a mutual fund.

On the other hand, if you buy mutual funds from the fund company directly, there is usually no extra fees, though most fund companies do require a minimum initial investment. For ETFs, you can buy only 1 share

In my opinion, if you plan to invest $100 every month, an index fund is a better option. If you want to invest $1200 once every year, then ETF may be better, given you don’t pay too much commission.

Then once I get $2500, I may transfer those assets to Zecco, or sell them all when I get $3000 to open a Vanguard account. Haven’t decided for sure yet. But at $500 the automatic purchase option of $4 puts the trading costs at less than %1, that’s still less than a third of what buying American Funds is costing me AT A DISCOUNTED RATE!

After that I might use it to get etf positions in some asset classes I can’t get with my mutual funds, such as small cap value, TRP’s representative fund of this class is closed.

I’m currently put as much as money i can save every month for the past few months, so i can accumulated enough amount for the minimum initial investment. For me $2500 is a lot of money. But i’m getting there, hopefully on March i will reach this goal along with a small amount of emergency money.

But, i do have a question though, which one is better…Index Fund or ETF?

I think it’s also worth mentioning that if you only have a few hundred dollars, it may be worth focusing on changing your habits and setting up a budget to build up those amounts.

Also, I hope this investor has an emergency fund setup. That would be important to have before worrying about stocks or funds.

Stumbled it btw:)