Weigh the expense ratio by doing the multiplication:
$5000 x 0.0005 = $2.50 / year
$5000 x 0.0016 = $8 / year
I disagree with an earlier post and several "ditto" comments: both bid-ask spread and NAV/market price issues can be ignored for Vanguard Total Stock Market ETF ("VTI") specifically. Not all Vanguard funds, but for "VTI" neither is a factor.
A market order for VTI will have the smallest bid-ask spread possible, because it's very heavily traded. There's $61 billion dollars worth of VTI to trade, making it the third largest ETF. The bid-ask will be $0.01 apart on ETF shares that trade for $106.70. The bid ask spread will be less than 1/10,000th of your purchase. Meanwhile, if you instead buy mutual fund shares, you'll get the closing price for that day, hours later. Most of the time the market goes up, so most often you will lose more money waiting until the market close than if you pay the $0.01 bid-ask spread and purchase VTI.
Second issue was the NAV vs price. According to Vanguard's website, the NAV and market price returns are exactly the same for the last 10 years, and since 2001. For "VTI" specifically, there isn't a problem with NAV vs market price.
https://personal.vanguard.com/us/funds/snapshot?FundIntExt=INT&FundId=0970#tab=1So for "VTI", Vanguard Total Stock Market ETF, both bid-ask spread and NAV/market price are not significant.
Another advantage of ETFs is the typical mutual fund minimum of $3,000 doesn't apply to ETF shares. If you look at Vanguard Total Stock Market Investor Shares, you can't even purchase the fund with less than $3,000 in starting money. With ETFs, with $1000 you can buy 9 shares of "VTI". You also get the savings from a lower expense ratio ($2.50/year vs $8/year) but that savings is admittedly small and temporary if you plan to have $10,000 in a couple years.
