Some surprising inaccuracies in the article. I realize the article was attempting to keep the explanations very simple and approachable but that is not really an excuse in my mind for giving faulty information.
8. What are the advantages of investing in mutual funds over ETFs?
Mutual funds offer the advantage of auto-investment, which is the option to automatically contribute a set amount at a predefined time. Again, this is more a preference than an advantage.
No mention of dividend reinvestment of mutual funds compared to ETF's.
No mention of ETF's required to be purchased in whole share amounts leaving a small amount of cash always sitting in your account.
9. Are ETFs more tax-efficient than mutual funds?
ETFs aren't more tax-efficient, per se. The ETF construct of indexing allows for lower turnover, which can result in lower capital gains distributions.
This is the big one in my mind. At least when the funds are held in a taxable account. The point is moot in a tax advantaged account.
ETF's are potentially much more tax efficient because when a firm redeems a creation unit from the ETF the fund can give the firm shares with the highest capital gains burden. Effectively skimming off much, if not most, accrued capital gains like a pressure valve. Mutual funds are much more often forced to directly sell stocks, triggering a taxable event in the form of a capital gains distribution. I realize Vanguard has a unique structure where the ETF and mutual fund are the same fund allowing their mutual funds to benefit from this practice. However, the article was written as a fact sheet for ETF's in general and many investors would come away with a faulty understanding.
"Oh, M. le Comte, it is only a loss of money which I have sustained... nothing worth mentioning, I assure you."