That trend has been a major impetus for recent fee-cutting moves by Vanguard, BlackRock, Schwab and others. Many of the cuts have come at ETFs. While index mutual funds have long been the first choice for anyone looking to invest on the cheap, they're now being undercut by the lowest-cost ETFs. For example, the lowest-cost stock ETF from Schwab now charges 0.04 percent.
A distinct feature is that ETFs can be traded throughout the day like stocks, unlike mutual funds that are priced only at the close of daily trading. Also, with ETFs, average investors pay the same expenses as institutional investors, unlike with mutual funds.
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