ETF vs index fund: which to choose
ETFs and index funds can track exactly the same index, but they work differently in ways that matter: how you buy them, how they're taxed and which profile each suits. It's not that one is better; they serve different styles.
What they have in common
Both are baskets tracking an index (say the S&P 500), with low fees and instant diversification. In essence, investing in the same index via ETF or index fund gives you almost identical market exposure. The difference is the "wrapper".
How you buy them
The ETF trades on an exchange like a stock: you buy and sell instantly during market hours, at the current price. The index fund is subscribed/redeemed once a day, at the closing value. The ETF is more flexible for those wanting timing control; the fund more "convenient" for invest-and-forget.
The tax difference (key in Spain)
In Spain there's an important difference: mutual/index funds allow transfers between funds without being taxed (you defer tax until you withdraw the money). ETFs, however, are taxed each time you sell at a gain. For someone investing very long term and switching funds, that transfer advantage can be significant.
Fees and minimums
Both have low fees nowadays. ETFs usually have very low management costs but you pay a broker trading commission each time. Index funds often charge no subscription fee and allow small automatic contributions, ideal for adding little by little each month.
Which suits you
For automatic periodic contributions very long term with the transfer advantage: index fund. For control of buy timing, more active trading or access to specific markets: ETF. Many people use both depending on the goal.
Where to start
First define how you'll invest: add a little each month and forget, or buy yourself when you decide? That answer, plus the fund transfer tax advantage, guides you more than any return comparison (which will be almost identical if they track the same index).