Not addressing your question, however.... The biggest negative(s) to most mutual funds.. 1. End of day only execution (some exceptions.... Rydex, Fidelity Select..) => BIG Slippage 2. Higher management fees than ETFs 3. Subjectively imposed "short term trading" penalties by many funds 4. Many still have sales loads or CDSCs While there are still lots of mutual funds and money in them, the ETF business model makes mutual funds virtually obsolete by comparison for most investors. I venture to suppose that if ETFs had been developed first, there never would have been a mutual fund industry.
What (if any) is the rule that prevents "blackbox op" in a mutual fund? Isn't an index mutual fund a "black box"? Or do they adjust all their positions by hand? Also, don't mutual funds use those VWAP buyside algos sold by the various institutional brokers?
Mutual funds can't short stocks. They report results daily as opposed to quarterly. They cannot lever where hedge funds can lever many times to one, in some cases thru derivatives 20+ to 1. Hedge funds don't charge a load but a management fee typically 2% and keep 20% of profits whereas mutual fund can charge a load but pays out dividends and 100% of profits.