For nearly 25 years, Exchange Traded Funds (ETFs) have been a popular passive investment vehicle for both household and professional investors due to their low transaction costs and high liquidity. But what are the pros and cons? How can you diversify your portfolio to avoid volatility? Today, we are joined by Professor Itzhak Ben-David, one of the world’s foremost academic experts on ETFs, the Neil Klatskin Chair in Finance and Real Estate at The Ohio State University (OSU) Fisher College of Business, and the Academic Director of the OSU Center for Real Estate. In this episode, we look at the current ETF market and the impact that ETFs have on underlying securities and investor outcomes. We discuss Morningstar ratings, the change that happened in 2002, and some mind-blowing data regarding hedge fund fees. We also dive into the correlation between miscalibrated CFOs and overconfidence; the unnecessary mental accounting people do when it comes to tax refunds, and so much more. This conversation makes for an incredibly diversified overview of a variety of topics that are relevant to financial decision-making at the household level. Finance experts will certainly find value here, too! Regardless of your level of experience, tune in today to learn more. Links From Today’s Episode: Rational Reminder on iTunes — https://itunes.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582. Rational Reminder Website — https://rationalreminder.ca/ Shop Merch — https://shop.rationalreminder.ca/ Join the Community — https://community.rationalreminder.ca/ Follow us on X — https://twitter.com/RationalRemind Follow us on Instagram — @rationalreminder Benjamin on X — https://twitter.com/benjaminwfelix Cameron on X — https://twitter.com/CameronPassmore Cameron on LinkedIn — https://www.linkedin.com/in/cameronpassmore/ Itzhak Ben-David — https://u.osu.edu/ben-david.1/ Itzhak Ben-David on LinkedIn — https://www.linkedin.com/in/ibendavi/ Financial Markets and Human Behavior - https://bpb-us-w2.wpmucdn.com/u.osu.edu/dist/d/7877/files/2023/08/202308_Rational_Reminder_podcast.pdf ‘Do ETFs Increase Volatility?’ – http://ssrn.com/abstract=1967599 ‘Mutual Fund Flows and Performance in Rational Markets’ – https://ssrn.com/abstract=383061 ‘The Performance of Hedge Fund Performance Fees’ – https://ssrn.com/abstract=3630723 ‘Paper on how people treat their tax refunds’ — ‘Managerial Miscalibration’ — http://ssrn.com/abstract=1640552 ‘The Persistence of Miscalibration’ — https://ssrn.com/abstract=3462107