It's a fact that millions of exchange traded fund (
) investors have long suspected: when it comes to investing, cost
is king. That's according to a study recently wrapped up by
In short, the study reveals that funds that cost the least
managed to lure the most investor dollars in the period from
1999-2009. But those results are exclusively limited to ETFs: both
low-cost equity mutual funds and ETFs garnered 86% of the net cash
ETF Assets Flower in April.
Low-cast bond funds gathered 78% of the net flash flow. Low-cost
ETFs alone attracted 59% of the net cash flow,
report Steve Dew and Olivier Ludwig for Index
. "Low cost" for purposes of the study was defined as funds with
fees and expense ratios that place them in the lowest quartile of
all U.S. funds.
Vanguard noted that its study likely highlights an investor
shift in focus now that returns over the last decade have been flat
while volatility has risen. [
Vanguard Fires ETF Pricing Shot.
For more stories about the growth of the ETF industry,
visit our ETF Performance Report category