Thinking big may end up leading to small returns for ETF investors, according to Barrons
An article by reporter Brendan Conway published this weekend makes note of two divergent trends in ETFs — ultra focused funds and funds that invest more broadly.
Conway writes that investors have "little to be gained" in these broad funds long term.
Why are more and more "mega-indexes" coming into existence? Conway points to increasing flows into international funds and the BlackRock
rivalry, with both trying to buy up more and more stocks.
Though some may believe these huge indexes all provide higher returns, Conway writes that over a three year period the difference in growth between standard funds and broader funds was only 16 basis points — not enough to make a huge difference to long term investors.
For more on these "mega-indexes," read the complete article
Stay ahead of the news ... Sign up for our email alerts now