I have read this question on the differences between both vehicles, but one the points was, perhaps, a bit under-emphasized: the relative risk.
I understand there are technical differences between both financial instruments, and I wonder if ETF's are further removed from the actual underlying holdings or assets giving value to the fund, as compared to regular mutual funds.
So, for instance, would VTI and Total Stock Market Index Admiral Shares be equally anchored to the underlying shares of the companies within the index? Are they both connected? Is VTI more of a "derivative"?
Not to preempt potential answers, but I just came across this:
Question: What is the primary legislation regulating mutual funds and ETFs?
That’s right; the vast majority of ETFs are organized and regulated under the “1940 Act,” the same legislation that governs mutual funds. It imposes a host of investor protections, including those related to organizational structure and investment activities. This makes ETFs that are subject to the 1940 Act among the most stringently regulated investment products available in the United States. Since I’m on the topic of regulation, I’d add that from a shareholder’s perspective, taxation of 1940 Act ETFs and mutual funds is the same.