Because exchange traded funds are bought and sold like individual stocks, they raise issues that traditional mutual fund investors don’t have to worry about.
For example, ETFs have so-called bid/ask spreads that are based on the liquidity of underlying securities. The ETF’s trading volume can also impact bid/ask spreads. [What are ETFs?]
Mutual funds are priced once a day at the close, but ETFs can be traded throughout the day. [What is an ETF? Premiums and Discounts]
Selena Maranjian for The Motley Fool notes that ETFs tracking the more illiquid asset classes have wider spreads. Examples include obscure emerging markets and high-yield bonds.