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Bogle: The Good--and the Bad--of ETF Trading

Any significant amount of trading will decrease your return relative to the market, says the Vanguard founder.

Christine Benz: Some investors are clearly using ETFs as trading vehicles, but what about advisors who seem to be building portfolios consisting of ETFs and they're kind of using them as long-term building blocks. That isn't a negative exercise, right?

Bogle: Anything that involves trading of mutual funds or for that matter, trading in stocks is a negative by definition. All traders capture the market return before cost. They're obviously equal after cost because they're trading with one another. So, the more you trade, the less your return, the less return you earn relative to the market. I don't know why people can't understand this.