How ETF investors fare
John Bogle’s mutual fund vs ETF analysis has now appeared, and it seems I was right: Bogle makes no attempt whatsoever to distinguish between buy-and-hold ETF investors, on the one hand, and ETF noise traders, on the other. (Or, to put it another way, he makes no attempt to restrict the ETF investors he’s looking at to those who would otherwise buy mutual funds.)
That said, Bogle’s analysis is pretty interesting — especially when he says that the average investor in Vanguard’s S&P 500 mutual fund actually outperforms the fund itself by 2.8 percentage points. Is that a result of dollar cost averaging, do you think?