On comparing Exchange-Traded Funds to index funds Mark Hulbert of the Hulbert Financial Digest says that on average ETF investors were more likely to try to time the market than those who invested in traditional index or mutual funds. Those who bought and held traditional funds more often achieved better performance even though the funds may have slightly higher fees. Like stocks, ETFs can be traded all day long and have no minimum investment or holding period whereas index funds trade only at the end of the day and often have a minimum holding period of 3 months and a minimum investment amount. These differences seem to encourage more trading among the ETF crowd.
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