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So if I bought $3000 worth of VEXMX and $3000 worth of VXF and did nothing else for say 10 years, I could expect each to be worth about the same

There is another caveat to keep in mind.

With mutual funds you can have the dividends automatically invested. With ETFs, that depends on your broker. I recently asked Scottrade about dividend reinvestment on ETF – they don't do it. (I know Ameritrade does whole share reinvestment on stocks for free, I haven't asked about ETFs).

That means if you buy an ETF at Scottrade, the dividends will give you small amounts of cash (probably just a few percent per year depending on what you get). When you're starting out, the dividends on $3k aren't that much. It won't be cost effective to pay the commission to reinvest your dividends yourself for a few years...

As long as you keep making annual contributions, your dividend cash would never sit idle for more than a year, and won't make much difference.

If you don't make regular contributions, mutual funds might be better for small purchases.

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