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The Myth of Cheaper ETFs

Open-end index funds often charge lower fees—and are at least as tax-efficient

Here is a surprise for most investors: Exchange-traded funds aren't always cheaper than traditional open-end mutual funds.

True, ETFs typically have much lower expense ratios than open-end funds. The average ETF's annual fee is currently 0.58%, versus 1.24% for the average open-end fund, according to data from investment-research firm Morningstar.

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