An analytical performance comparison of exchanged traded funds with index funds: 2002-2010.Abstract Exchanged Traded Funds (ETFs) have been gaining increasing popularity in the investment community as is evidenced by the high growth both in the number of ETFs and their net assets since 2000. As ETFs are in nature similar to index mutual funds, in this paper we examined if this growing demand for ETFs can be explained through their outperformance as compared to index mutual funds. We considered the population of all ETFs with inception dates prior to 2002 and then for each ETF found all the passive index mutual funds that had the same investment style as the selected ETF and had inception date prior to 2002. This lead to a sample of 230m paired matches for all the styles. Within each investment style we matched every ETF with all the passive index funds in that investment style and compared the performances of the matched pairs in terms of Sharp Ratios and risk adjusted buy and hold total returns for the period 200-2010. We then applied the Wilcoxon signed rank test to examine if ETFs had better performances than index mutual funds during the sample period. We conducted the test both within each style and for all the styles together. In terms of Sharpe Ratio, out of the 12 styles included in the sample, in 5 cases the conclusion was that ETFs outperformed index funds, for the 3 styles, U.S. Broad market, U.S large cap growth, and U.S. Reits index funds outperformed ETFs and for 4 styles there was statistically no significant difference between ETFs and index funds performances. Out of the 230 paired matches of all the styles, ETFs outperformed index mutual funds in 134 of the times in terms of Sharpe Ratio, however, the test of the hypothesis showed no statistically significant difference between ETFs and index funds performances in terms of Sharpe ratio. Break-down of the results for riskadjusted buy and hold total returns was slightly different from those for the Sharpe Ratio, though the overall conclusion was the same. For 5 of the styles index funds outperformed ETFs, for 3 styles ETFs outperformed index funds, and for 4 styles there was statistically no significant difference between the performances of the two. Out of the 230 paired matches of all the styles, ETFs outperformed index mutual funds in 125 of the times in terms of risk adjusted buy and hold total return, however, the test of hypothesis showed no statistically significant difference between ETFs and index funds performances in terms of risk adjusted buy and hold total return. These findings indicate there is statistically no significant difference between ETFs and passive index mutual funds performances at the fund level and investors' choice between the two is related to product characteristics and tax advantages.

The problem is that prior studies examining the impact of monetary policy instruments on the equity market have produced mixed results. The purpose of this study was to determine the impact of changes in money supply (M2), federal funds rate (FFR), and federal funds futures on the expected rate of returns of publicly traded companies. We developed and tested a multifactor capital asset pricing model and applied regression methodologies suitable for panel data analysis to analyze the data. The multiple regression results showed positive moderation effect of M2, and negative moderation and mediation effects of FFR and federal funds futures on the expected rate of returns of publicly traded companies. The socioeconomic implication of these findings is that the Federal Reserve decisions on changing M2 is not influenced by changes in the equity prices, but changes in the equity prices are a signal for the Federal Reserve to adjust its decision on changing the FFR.

The U.S. national debt reached the astounding figure of 22 trillion dollars in 2018 (Gomes & Sinclair, 2019). It splashed onto the headlines of newspapers and became a topic of interest for Nobel laureate economists, dividing opinions on the potential impacts and the necessity of corrective measures. Krugman (2019) advocates that the national debt is trivial for a large economy like the U.S.; whereas, economists, such as Summers (2019), assume a more cautious position in recommending clear restrictions on the never-ending rise in the national debt. Some intriguing questions persist: should measures to restrain or reduce the debt be taken? If so, what is the ideal time to put them into effect? The purpose of this study is to analyze the reasons for the increasing U.S. national debt and to raise a discussion on the ideas of these reputed economists to address these questions. Additionally, the fundamental principles of risk management have been explained to evaluate the national debt from a different perspective (Homan, 2013). The findings of this research show that there are similarities between the theory of risk management and the risk concerns involved in the U.S. national debt. The social impact of this research includes the potential for the risk management tools identified to be used in analyzing the sovereign national debt.

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