There are zero reasons for it to be easier to set it and forget it with a mutual fund than with an ETF. In fact, it is a slightly easier to do a mutual fund exchange than it is to trade ETFs. Either you set it and forget it, or you don't.The article argues that ETF index fund investors underperform mutual fund investors by nearly 1% and places much of the blame on advisors.
https://www.barrons.com/articles/jack-b ... LEADSUPP_1The article concludes that investors should just set it and forget it and that is easier to do with mutual funds.While many mutual fund investors are retirement plan employees, the typical ETF investor is a financial advisor. (Advisors control about two-thirds of ETF assets, according to Cerulli Associates.) Such investment professionals should know that trading too much isn’t good, but may want to show clients that they’re working hard on increasing returns by trading.
What is true is that ETFs insulate an investor from the effects of trades of other investors in a fund, although with a large index mutual fund it generally is not a significant issue.
One reason advisors like ETFs is because they decouple the investment product provider from the custodian. Another reason many advisors may indeed like ETFs is because they like to trade (not the other way around). ETFs don't have frequent trading restrictions.
I think it is nonsensical to claim that advisors or other investors are choosing to trade when they otherwise would not because they are holding ETFs instead of mutual funds. There is more trading with ETFs because people who like to trade prefer ETFs. That does not imply that they like to trade because they hold ETFs.
Statistics: Posted by Northern Flicker — Sat Sep 14, 2024 11:02 pm