We've had discussions a number of times on the benefits of ETFs vs Funds for low cost indexing strategies - especially where the intention is to increase the amount invested over time using dollar cost averaging (DCA). I thought I would do up a simple spreadsheet to calculate the average annual costs associated with a number of different strategies to demonstrate the impact of brokerage / buy spread and of management expense ratios (MERs). I've used three funds: STW - SPDR S&P/ASX 200 Index Exchange Traded Fund VAS - Vanguard Australian Shares Index Exchange Traded Fund VAN0010AU - Vanguard Index Australian Shares Fund (unlisted managed fund) Costs associated with these funds: Management Expense Ratio (MER): STW: 0.285%pa VAS: 0.27%pa VAN0010AU: 0.75%pa for the first $50,000 0.50%pa for the next $50,000 0.35%pa for the balance over $100,000 Brokerage / Buy costs: VAN0010AU: 0.20% STW & VAS: I used the brokerage costs listed by Netwealth (mostly because of the original question I was answering which used Netwealth as an example): $17.99 per trade for transactions up to $5,000 $19.99 per trade for transactions above $5,000 up to $10,000 $26.99 per trade for transactions above $10,000 up to $25,000 0.11% per trade for transactions above $25,000 I've looked at two scenarios: A) an initial amount of $10,000 invested, and then an additional amount added monthly B) an initial amount of $10,000 invested, and then an additional amount added quarterly, with each quarterly investment equal to three months worth of the monthly investments in A) - ie. $100 each month = $300 each quarter I've calculated the brokerage / buy costs of each investment, and then added the monthly MER costs (annual MER divided by 12). I have NOT taken movements in investment values into account - I have assumed that all funds perform the same net of fees. Final costs are added up over a 3 year period, and then an annual average cost is calculated. Summary There is very little difference in cost between STW and VAS (assuming you use the same broker, brokerage will be the same, and MER is very similar) There is very little difference in cost between monthly and quarterly investment in VAN0010AU (buy costs are a fixed percentage of the amount invested, unlike brokerage for an ETF) For small monthly investments, the managed fund is cheaper than the ETFs until you get close to $2,000 per month being invested (due to high brokerage costs for ETFs) For quarterly investments, the ETFs start becoming cheaper once you pass $600 per quarter (brokerage becomes manageable and MER is much cheaper than the managed fund) Note that exactly which will be the cheaper option for your own situation depends on a number of factors: the initial amount invested the additional amounts invested the frequency of additional amounts the cost of brokerage ... so don't assume that these numbers I've provided here will necessarily apply to you.