Probably a stupid question regarding ETF's

[spider]

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When you sell mutual fund units, the sale is processed at the end of day at the end of day unit price based on end of the day market value of the underlying assets. I think they do trade simultaneously, just not at the instant the sale order is issued.

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OK, but this end of the day trade is not a market transaction the same way an ETF is traded on an exchange. The scandal from a few years ago resulted b/c certain insiders or friends of the MF were able to buy/sell the MF at favorable prices.

I don't really understand the details of how MFs are sold and redeemed to ordinary investors to explain beyond that, but I do feel ETF transactions on an open exchange are (and always will be by design) more transparent and thus less susceptible to fraud than MFs. But don't get me wrong, protections for MF investors are generally pretty good and obviously things like Vanguard index funds were a tremendous boon to the small investor.

[spider]

One explanation of the scandal:

Mutual Fund/Late Trading Schedule

To characterize it as simply as possible, ordinary investors traded at a priced based on news at 4pm. Favored investors/insiders could trade at that same price, but using news that came from after 4pm (hence the advantage and the term "late trading").