All In, Are Mutual Funds More Expensive Than ETFs?

What about tax efficiency? Isn't this important? Absolutely. But in a practical sense, selecting funds based solely on tax efficiency is like the tail wagging the dog. It's important, but the bottom line is the bottom line. In other words, what's important is what you get after all fees and taxes, not before. Perhaps the best way to keep taxes to a minimum is to select index funds where the turnover ratio and taxes are low. 

You could also buy the market by investing in passive index funds or you could look for talented managers with a propensity to outperform their index. In any event, here's what we know for sure. If you buy an index fund, you'll never beat the index, since the fund has to deduct expenses. Conversely, if you buy an actively managed fund, you may outperform its index or you may not. But at least you have a chance at it.  

My personal belief is to buy some of both. I like index funds for certain categories where alpha is harder to achieve and actively managed funds where it is not. Again, I would turn to the experts at Morningstar for that analysis, as they have some excellent research into categories in which active management is more likely to succeed.