Exchange-traded fund

Introduction
An exchange-traded fund, or ETF, is an investment vehicle traded on a stock exchange in the same way as a stock. ETFs, however, are like mutual funds in that they hold a collection of assets, usually stocks and bonds. Unlike open-ended mutual funds, ETFs can trade at a premium or discount from their net asset value. However, large-enough differences allow institutional investors to perform arbitrage by swapping blocks of securities for ETF shares. In practice this means that the difference between price and NAV is generally very small.

Costs

 * Commissions
 * Bid-ask spreads
 * Premium and discount

ETF vs. Mutual funds

 * Calculate and compare costs for Vanguard ETFs and mutual funds
 * To ETF or Not to ETF by Rick Ferri

Academic Papers

 * Birdthistle, William A., "The Fortunes & Foibles of Exchange-Traded Funds: A Positive Market Response to the Problems of Mutual Funds" . Deleware Journal of Corporate Law (DJCL), Vol. 33, No. 1, 2008 Available at SSRN: http://ssrn.com/abstract=1013614
 * Huang, Jennifer C. and Guedj, Ilan, "Are ETFs Replacing Index Mutual Funds?" (March 31, 2008). Available at SSRN: http://ssrn.com/abstract=1108728