Despite Jack Bogle's public criticism of ETFs, Vanguard [profile] is fighting back against attacks on the ETF business.

Jason Kephart of InvestmentNews reports on a new Vanguard study, which examined more than 36,000 ETF positions and more than 500,000 mutual fund positions under the Vanguard Total Stock Market Index Fund (VTI), Vanguard Total Bond Market Index Fund (BND), Vanguard Emerging Markets Index Fund (VWO) and Vanguard REIT Index Fund (VNQ) from 2007 through 2011.

InvestmentNews notes that, at a conference in February, Bogle said, "There's no question that ETFs are the greatest trading innovation of the 21st century ... But the question is 'Are they the greatest investment innovation?' No."

The Vanguard team's conclusions contradict their founder and others who claim that ETFs encourage excessive trading which is not good for longterm clients.

Joel Dickson, a principal in Vanguard's investment strategy group, is quoted explaining that:

“While differences exist between the characteristics of people who buy each investment type, our analysis shows that claims of speculative trading behavior among ETF investors are greatly exaggerated." 

Edited by: HFD


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