I wish he showed how he's actually getting those numbers. It's not clear to me he's controlling on various important confounding variables. If most ETFs were in fixed income and most TIFs were in equities, that would explain the result for instance.Elysium wrote: ↑Wed Oct 14, 2020 6:50 pmHere from this article. Go to the question on - Why are ETFs a loser’s game?
He explains it as follows:
With all the cash flows into ETFs, $840 billion in the last 10 years, compared to $400 billion into TIFs, I wondered how TIFs could have kept up in terms of their asset growth. The answer is that ETFs have had $504 billion in market appreciation, and TIFs have had $800 billion. Two-thirds of the growth in TIF assets has been in the form of investment returns, and only one-third of the growth in exchange-traded funds has been investment returns. That’s where the performance differential that I cited earlier comes from. The investor return for TIFs average 7.4%, for ETFs it was 4.6%, even less than the 6.2% investor return in active funds.
Those numbers are not ready for a Financial Analysts Journal article, but if you average them they do cross check closely against the known returns we have for all the ETFs and all the TIFs (Strategic Insight data). It’s a pretty good indication of where things are going.
You would notice that he acknowledges these numbers are not ready for Journal of finances article, but they pass less rigorous cross verification. Having said that, do I think there is cause and effect? I don't know and I don't care very much, because ETFs or Traditional funds don't make any difference to me as far as my own situation is concerned, and I think it doesn't for almost anyone on this forum.
Any ways, thanks for the link.