+1, except where there is a choice between a big liquid ETF and a similar no load index fund I would in most cases pick the ETF for tax efficiency. (unless for

+1, except where there is a choice between a big liquid ETF and a similar no load index fund I would in most cases pick the ETF for tax efficiency. (unless for IRA/401K, tax not an issue) When you buy an index fund, you get a 1099 and pay capital gains taxes on any profits the fund takes any time it trades; also when you buy it you buy into the fund's tax basis, so if they bought all their stocks lower than where they are now, you would pay capital gains taxes based on where the fund bought them instead of from the price when you bought the fund. You might even take a capital loss and still have paid capital gains taxes. see for instance http://etf.about.com/od/etftaxes/a/ETF_Tax_Benefit.htm http://etf.about.com/od/etftaxes/a/ETF_Tax_Benefit.htm