Why does ETF structure matter? Morningstar ETF analyst Michael Rawson looks at two similar ETFs to highlight what drives the success of some ETFs over others. First-mover advantage isn't always the be-all, end-all, Rawson concludes, and neither is liquidity.

Morningstar compares the SPDR S&P MidCap 400 [profile] and the five-years-younger iShares S&P MidCap Index [profile], pointing to structural advantages of the latter's regulated investment company (not unit investment trust) structure driving tracking capability differences and higher flows.

"Index fund performance does not necessarily equal index return less the expense ration due to various factors, most notably trading costs."

Fundsters may want to take a look at the full story to find out more about what drives ETF success. 

Edited by: HFD


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