You seem to be confused about finance. There is no particular connection between a fund's risk and tax exposure, and whether it is exchange tradable or not. Some regular mutual funds are very low risk. Some ETFs are very high risk. Tax exposure is largely irrelevant for 401(k), IRA, and other tax-free retirement accounts.

    > Regular mutual funds usually have higher risk ... than the ETFs.

Can you provide some specific examples? If anything, the transaction friction around mutual funds prevents most regular investors from unnecessary trading that exchange-listed ETFs allow. TL;DR: For most people, more trading means more losses or worse returns.