This is somewhat of a follow up to my other question on ETFs vs Mutual funds for the long term investor, but appropriately a different question.
From the basic research I have done, it seems that ETFs are superior to no-load, low-fee, passively manage mutual index funds for the long term investor engaging in the buy and hold, dollar-cost-averaging strategy. Both of these types of investment vehicles track an index of funds which diversifies your money and seeks to obtain the average market growth. However, for ETFS:
- The expense ratio is lower.
- The tax advantages are better.
- There are no commission fees on ETFs as long as you purchase your broker's ETFs.
The logic behind this sounds solid to me, but I would like to see some long term empirical evidence to back up the proposition that the lower expense ratio and tax advantages of ETFs maximize your return as opposed to mutual index funds. Specifically, are there any studies that attempt to match index funds to ETFs which track identical indexes over some long period of time (10+ years, or even all the way to 1993 would be nice), as there are many studied which track no-load, low-fee, passively managed mutual index funds compared to loaded, high-fee, actively managed mutual index funds?