Exchange-Traded Funds Not for Everyone

Exchange-Traded Funds Not for Everyone

This paper describes the increasingly popular exchange-traded funds; ETFs, for short; as alternatives to traditional mutual funds. ETF features are identified and compared with index mutual funds in terms of trading, creation and redemptions, cost comparisons, and tax efficiency. The results indicate that transaction costs limit ETF attractiveness for small investors. The in-kind creation and redemption process of ETFs provide significant tax efficiencies. Finally, the study finds little or no ETF advantage for the tax deferred, long term retirement investor.


by Wilfred L. DellvaDr. Dellva is an associate professor of finance at Villanova University in Villanova,Pennsylvania.

텍스트 링크 --> http://www.tiaa-crefinstitute.org/research/articles/docs/040001a.pdf