Abstract
The performance of country exchange-traded funds and closed-end funds is investigated over the 2002 to 2011 period. Operating characteristics (i.e., expense ratios and portfolio turnover) and investment results (i.e., return, risk, and risk-adjusted return) are studied for investment funds with at least ten years of data. We find that although exchange-traded funds have significantly lower expenses, their performance is statistically worse than those of closed-end funds. Despite their accurate, widely-advertised claims to have lower annual expenses, investors would be wise to stay focused on the higher return (after deducting expenses) afforded by closed-end funds.
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