Yeah, all good stuff to consider.
Management Expense Ratios are an interesting subject in themselves. When is an MER not an MER?
Take, for example, AFI. Internally managed. So it has directors fees and the like, i.e. essentially fixed management costs (unless they give themselves a pay rise!) So the MER can change depending on the fluctuations in the price of the share holdings.
For ETFs where there is a fixed MER, their income varies simply due to to the movement in the index. If the MER for a particular EFT is 0.3% and the index is 3,000, their cut is $9. Should the index move to 4,000, then their cut is now $12. Conversely, if the index falls, so does their income.
There are a couple of other differences I have noticed. Index funds are flow-through tax entities in that all the income received is distributed and so they do not have reserves unlike, say, AFI. It seems that when things go pear-shaped, as it is wont to do on the odd occasion, Index funds cannot dip into reserves (they have none) to maintain distributions whereas AFI and its peers can.
The other thing is that index fund managers can only take their income from income received not capital gains or franking credits which is why the investor sometimes is left with a reduced or little income but lots of franking credits which must be passed to the investor.
The other odd thing, my view only, is that I was investigating placing funds with an EFT which invested overseas. I read the PDS listed on the Australian web-site which referred me to Terms and Conditions of the principal overseas manager which is where I discovered that this index funds could allow up to one-third of it holdings to be subject to short-selling or securities lending. I thought that was a very strange thing to be allowed for an index fund so I didn't go ahead with it.
The above is just stuff which I have found interesting in my journey. Not making any judgement. I have funds with both Index and LICs. I'm simply interested is some matters.