FYI: A quirk in how ETFs trade means that bond ETFs have a key advantage over bond mutual funds
At first glance, there doesn’t seem to be much difference between bond mutual funds and bond ETFs. Like mutual funds, bond ETFs roll up hundreds, even thousands, of bonds into a single portfolio at a purchase price significantly less than what it would cost to invest in each bond individually. Also like mutual funds, ETFs pay regular dividends and come in a wide variety of risk and income flavors.
But look more closely, and you’ll see that the similarities between the two only run skin deep.
Regards,
Ted
http://www.etf.com/publications/etfr/bonds-etfs-vs-mutual-funds?nopaging=1
