Suppose that I buy a popular exchange traded fund (ETF) tracking the S&P 500® today, leave it in my brokerage account for 20 years, and then sell it. What return should I expect? The answer, obviously, is that my return should reflect the movements in the S&P 500 (net of fees) over my 20-year holding…
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Our colleagues at S&P Global Market Intelligence recently completed a paper analyzing the impact of exchange-traded funds on stock-level pricing. Their work found that “…the impact of ETF trading is transient and of only a modest magnitude under even extreme assumptions” (my italics). This conclusion is a rebuttal to critics who believe that the growth…
The investment community was bombarded last week with a paper arguing that passive investing is “worse than Marxism.” That any putatively-serious observer can compare an investment strategy, even one he doesn’t like, with a political ideology responsible for the deaths of millions boggles the imagination, but maybe I’m just too sensitive. The paper’s argument seems…
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