Comments on: How ETF investors fare

By: fred

fred — Fri, 19 Jun 2009 16:45:24 +0000

Broad-market index funds/ETFs can outperform the underlying index by lending securities to short-sellers, since gains from this can outweigh their negligible trading costs. For example, Vanguard’s total stock market index has 7% turnover, and much of that can be handled either by trading with other Vanguard funds (or via ultra-low-cost dark pool transactions. Thus their trading costs are probably within spitting distance of zero, and most of what they call expenses has to do with account management (toll-free numbers, printing and postage costs, etc).

By: Logan Bowers

Logan Bowers — Fri, 19 Jun 2009 15:54:45 +0000

DCA has really boosted my portfolio in the last year. The importance of DCA during a volatile market cannot be overstated. Even though the S&P is down ~40% this year, my overall portfolio is quite positive on account of my weekly purchases picking up a LOT of shares on the cheap during, e.g., March.

By: Max

Max — Fri, 19 Jun 2009 00:34:27 +0000

Pay no attention to “investor returns”, it’s a completely bogus concept when applied to individual funds, especially market index funds.

By: peatey

peatey — Thu, 18 Jun 2009 20:58:30 +0000

Felix, there is a index analytics that advises on capturing alpha over S&P (adds, deletes, and so forth; I know Lehman/Barclays had a thriving practice group in that) because the herd just follows after the fact and a lot of the index changes are pretty formulaic and to a degree predictable. That’s why they could outperform the underlying.