Reduced costs
This is one of the main reasons why many people choose ETFs over mutual funds. There are a number of fees associated with traditional mutual funds, the most notable being load fees and 12b-1 fees.
Load fees are used to compensate brokers and other intermediaries involved in the sales process. Separately, 12b-1 fees are used to cover the advertising and marketing costs of the fund.
ETFs, on the other hand, do not have load fees or 12b-1 fees.
Moreover, most mutual funds are actively managed and can have significant operating expenses, the cost of which is usually passed on to the investors. ETFs, on the contrary, are passively managed and their operating expenses are considerably lower.
This is why, on average, an ETF is much cheaper than a mutual fund.
