Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
961672 | Journal of Financial Markets | 2011 | 21 Pages |
Abstract
This paper examines the implications of substitutability of two similar investment vehicles: conventional index mutual funds and exchange-traded funds (ETFs). It seeks to explain the coexistence of these vehicle types, which offer a claim on the same underlying index return process, but have distinctly different organizational structures. This study compares aggregate fund flows into conventional open-ended index funds to those into ETFs for various underlying indexes. The study shows that conventional funds and ETFs are substitutes, but not perfect substitutes for one another. Evidence suggests that the coexistence of both instruments can be explained by a clientele effect that segregates the two vehicles into different market niches.
Keywords
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Anna Agapova,