Though many investors - laden with significant losses in their 401(k)s and flat returns on other products – have turned to ETFs to try to even out their earnings, new Vanguard research says ETFs have not necessarily launched a new generation of desparate day-traders.
According to a new study, Evaluating Dollar-Weighted Returns of ETFS versus Traditional Fund Returns, Vanguard says the critics of ETFs base their day-trader madness argument on share-turnover data that's measured at an institutional level, not the individual level.
Instead, the company examined some 3.2 million individual transactions from more than 500,000 positions held in traditional mutual fund and ETF share classes of four different Vanguard index funds from 2007 through 2011.
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