Abusing ETFs
نویسندگان
چکیده
Do ETFs, one of the most popular investment products in recent times, benefit individual investors? Using data from one of the largest brokerages in Germany, we find that individual investors do not improve their portfolio performance, even before transactions costs, by using these passive products. Using counterfactual analysis, we show that this occurs mostly from buying ETFs at “wrong” points in time rather than choosing “wrong” ETFs. Therefore, adopting a buy-and-hold strategy is more important than selecting better ETFs for individual investors. JEL classification: D14, G11, G28
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