The Dark Side of ETFs and Index Funds
Research Seminars
Academic Areas Finance
Utpal Bhattacharya, Associate Professor, Kelley School of Business, Indiana University
June 21, 2013
| 3:00 PM - 4:30 PM | Friday
AC 2 MLT (Mini Lecture Theatre), Level -2, hyderabad, India
For ISB Community
Abstract:
Do popular investment products such as passive ETFs and index funds benefit individual investors? Using data from one of the largest brokerages in Germany, we find that individual investors worsen their portfolio performance after using these products compared with non-users. As these securities make market timing easier, we investigate whether this decrease in users’ portfolio performance is primarily due to bad market timing. Our answer is yes.
Do popular investment products such as passive ETFs and index funds benefit individual investors? Using data from one of the largest brokerages in Germany, we find that individual investors worsen their portfolio performance after using these products compared with non-users. As these securities make market timing easier, we investigate whether this decrease in users’ portfolio performance is primarily due to bad market timing. Our answer is yes.
