Lower Fees Are Driving Investors from Mutual Funds to ETFs

Lower Fees Are Driving Investors from Mutual Funds to ETFs
April 12, 2021
Proponents of exchange traded funds (ETFs) frequently cite their rock-bottom fees. According to a Kiplinger article, various studies substantiate this claim.
“Numerous studies show that over the long term, managed mutual funds cannot beat an index fund, such as an ETF,” the article noted. “For example, according to the SPIVA scorecard, 75% of large cap funds ‘underperformed’ the S&P 500 over five years through Dec. 31, 2020.  Almost 70% underperformed over three years, and 60% over one year.  And this is just the tip of the iceberg, with most other managed mutual funds — both domestic and international — underperforming their applicable index.”

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