index mutual funds vs etf

tldr; it seems like etfs are better in general because of the creation/redemption in-kind feature of ETFs.

overviews from investopedia

The most important issues: management fees, shareholder transaction costs, taxation, and other qualitative differences.

overview from bogleheads

special consideration for vanguard

Vanguard ETFs are structured as another share class of a mutual fund, like Admiral or Investor shares. This is a process unique to Vanguard, protected by a patent until 2023, with two important consequences for the mutual fund investor: 1. Tax efficiency: the mutual fund shares benefit from the disposition of capital gains through ETF shares, making Vanguard funds with ETF share classes as efficient as an ETF. 1. This seems to imply that where you see all three in a vanguard prospectus, no need to think about taxation, like VTSAX and VTI. (though VTSAX has higher expense ratio). "look for "Also available as an ETF". Most or all index funds do have ETF shares and benefit from the above considerations" 2. Conversion: mutual fund shares can be converted to ETF shares without a taxable event. This helps when transferring assets to another broker, including charitable donations. Conversion in the other direction is not possible. The second point is an argument to start with mutual fund shares at Vanguard, if unsure. One can always convert to ETF later if needed.

why would you want a mutual fund instead of an etf?

Index funds invest their dividends immediately, whereas the trust nature of ETFs requires them to accumulate this cash during the quarter until it is distributed to shareholders at end-of-quarter. Bigger deal if we were to return to a dividend environment like in the 1960s and 1970s.
shareholder transaction costs are usually zero for index funds, but this is not the case for ETFs. In fact, shareholder transaction costs are the biggest factor in determining whether or not ETFs are right for an investor. With ETFs, shareholder transaction costs can be broken down into commissions and bid-ask spreads. The liquidity of the ETF, which in some cases can be material, will determine the bid-ask spread.
simplicity: don't need a brokerage account sometimes and can buy from a bank

why would you want an etf instead of mutual fund?

ETFs generally have the lowest ERs available to small investors.
Mutual fund expenses can be somewhat higher, with the exception of Vanguard Admiral funds which are the same, or slightly higher, than their ETFs. The various fees of active mutual funds can be much higher, sometimes outrageous; see Mutual funds and fees for more details.
Taxes only taken when you sell.
ETFs can rid themselves of capital gains inherent in the fund by transferring out the securities with the highest unrealized gains as part of the redemption in-kind process.
In nearly all cases, the creation/redemption in-kind feature of ETFs eliminates the need to sell securities; with index mutual funds, it is that need to sell securities that trigger tax events.
the constant rebalancing that occurs with index funds because of daily net redemptions results in explicit costs in the form of commissions and implicit costs in the form of bid-ask spreads on the subsequent underlying fund trades. ETFs have a unique process called creation/redemption in-kind (meaning shares of ETFs can be created and redeemed with a like basket of securities) that avoids these transaction costs.
a look at cash drag—which can be defined for index funds as the cost of holding cash to deal with potential daily net redemptions—favors ETFs once again. ETFs do not incur this degree of cash drag because of their aforementioned creation/redemption in-kind process.
management fees are generally lower for ETFs because the fund is not responsible for the fund accounting (the brokerage company will incur these costs for ETF holders).