Abstract

http://ssrn.com/abstract=2022442
 


 



Abusing ETFs


Utpal Bhattacharya


Hong Kong University of Science & Technology - HKUST School of Business and Management

Benjamin Loos


Goethe University Frankfurt - Department of Finance

Steffen Meyer


Leibniz Universität Hannover

Andreas Hackethal


Goethe University Frankfurt - Department of Finance

November 22, 2014

Kelley School of Business Research Paper No. 2014-46

Abstract:     
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.

Number of Pages in PDF File: 55

Keywords: household finance, retail investors, ETFs, passive investing, active investing, security selection, market timing

JEL Classification: D14, G11, G28

working papers series





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Date posted: March 15, 2012 ; Last revised: December 1, 2014

Suggested Citation

Bhattacharya , Utpal and Loos, Benjamin and Meyer, Steffen and Hackethal, Andreas, Abusing ETFs (November 22, 2014). Kelley School of Business Research Paper No. 2014-46. Available at SSRN: http://ssrn.com/abstract=2022442 or http://dx.doi.org/10.2139/ssrn.2022442

Contact Information

Utpal Bhattacharya (Contact Author)
Hong Kong University of Science & Technology - HKUST School of Business and Management ( email )
Clear Water Bay
Kowloon
Hong Kong
Benjamin Loos
Goethe University Frankfurt - Department of Finance ( email )
Grüneburgplatz 1
Frankfurt am Main, 60323
Germany
Steffen Meyer
Leibniz Universität Hannover ( email )
Königsworther Platz 1
Hannover, DE 30167
Germany
Andreas Hackethal
Goethe University Frankfurt - Department of Finance ( email )
House of Finance
Grueneburgplatz 1
Frankfurt am Main, Hessen 60323
Germany
+49 69 79833700 (Phone)
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