[Sniper]

James,

In a nutshell... index funds have a small management fee and usually no transaction costs, while ETFs have a built in very small fee and brokerage commissions on transactions.

If you plan on making monthly contributions to add to your position an index fund may work out to be cheaper and you can usually setup automatic transactions. You can also purchase fractional shares, so its easy to make same dollar value add ons each month.

However, if you plan on actively trading your posiions, even with the transaction costs, ETFs allow you to move in and out at any time of the day. Some ETFs are limited to trading in 100 share blocks.

So the answer is, it depends on what your plan is.