Finance
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putting aside the fact i had to google to find out
an ETF is.... what was their reasoning?
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Not speaking for them, but I used to work in a place that managed some mutual funds among other things. Basically, a mutual fund is doing very well if it outperforms the market (as defined by an appropriate index) most of the time; for it to outperform the market every year is almost unheard of. So just buying the index (through an Index fund or ETF) is easier than finding a mutual fund that will consistently outperform the index.
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a mutual fund that will consistently outperform the index.
And funds that don't get closed and rolled into funds that do.
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Mutual funds also generally have much higher fees so in order to be a better choice than an index they need to beat the index by more than the increase in costs.
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Mutual funds also generally have much higher fees so in order to be a better choice than an index they need to beat the index by more than the increase in costs.
I forgot to mention that. Where I was working, they had 8 people researching stocks to buy, and another 10 doing the day-to-day portfolio management.
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Except that Index funds are mutual funds, thus their argument that ETFs always have lower fees doesn't hold water.
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This seems to be my impression: people who say something like that seem to be using "mutual fund" as a synonym of "actively-managed mutual fund", which need not be the case.
