ETFs vs. Mutual Funds: Evidence from the Greek Market

Gerasimos G. Rompotis
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Gerasimos G. Rompotis: KPMG Greece (Senior Auditor), National and Kapodistrian University of Athens (Researcher)

South-Eastern Europe Journal of Economics, 2011, vol. 9, issue 1, 67-84

Abstract: This paper expands the debate on "Exchange Traded Funds vs. Traditional Mutual Funds" using for the first time data from the emerging Greek ETF market. In particular, trading and business data of the first ETF launched in Greek market, namely the ALPHA ETF FTSE ATHEX 20 are employed along with the respective data of its mutual funds counterparts (one index fund and 3 active mutual funds) so that we will examine various issues concerning return, risk and expense features of these competitive investment vehicles. Four different open-ended mutual funds are used in the study, each of which has the same benchmark as the ETF considered. The applied empirical analysis provides various interesting findings. At first, the classic mutual funds are more expensive than the ETF but they perform better and are less volatile. Going further, the ETF is more conservative that the open-ended mutual funds. Moreover, the relevant performance of the ETF in respect of the return of the tracking index is better than the corresponding performance of the funds. Finally, the tracking error of the ETF is reasonably found to be lower than the tracking error of the actively managed funds but it is greater than the tracking error of the index fund.

Keywords: ETFs; Mutual Funds; Performance; Risk; Expenses; Tracking Error (search for similar items in EconPapers)
JEL-codes: G12 G15 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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