How Do You Compare ETFs?

In today's roiling markets, ETF due diligence takes on new significance.

Reviewed by: Lara Crigger
Edited by: Lara Crigger

(For more on this topic, please join us on Thursday, April 2 at 2 p.m. ET for our free webinar: "Pick This, Not That! How To Compare ETFs.")


This article was originally going to be a lot different.

We had planned to roll out our new ETF Comparison Tool, which will let investors pit two ETFs of their choice head-to-head, and I was going to take the chance to crow to the skies about how nifty it is. (And it is. It really is. You can check out our beta version here.)

Then the past two weeks happened. Overnight, the orderly markets we'd all gotten so used to vanished, replaced with cratering oil prices, almost-daily market trading halts, falling interest rates, negative bond yields—the list just keeps going. We have entered the fastest-occurring bear market in history, and stock prices show no signs of stopping their slide anytime soon.

We went back and forth on whether to even do this webinar under these circumstances. When the markets were melting and 401(k)s were tanking, would worried, homebound investors even care about a new way to slice and dice their investment data?

In the end, however, we concluded that now was in fact the perfect time to launch the ETF Comparison Tool—because in these uncertain times, it's never been more important for investors and advisors to have accurate, accessible data to inform their investment choices.

Which Metrics Matter Most?

Not all ETFs are created equal. Even in the best of times, teasing out the differences between ETFs can be a laborious task, especially for niche products or funds with similar portfolios.

And these are hardly the best of times.

That's if we can even agree on which differences matter. Naturally, investors and advisors have plenty of opinions about the best criteria to use in evaluating ETFs. Cost and performance matter, of course; but so do other metrics, including liquidity, closure risk and even issuer brand:

Advisors: Importance of Various ETF Attributes, 2019

Source: Cerulli Associates


When markets begin to zigzag wildly, these metrics can change day by day, sometimes hour by hour. That's especially true for trading costs, like bid/ask spreads (as we've seen in the bond ETF market lately).

That's why it's so useful to have an accurate, real-time snapshot of the differences between two ETFs. Comparative data helps you spot arbitrage and tax-loss harvesting opportunities as they arise, of course, but even buy-and-hold investors benefit by getting the reassurance they need to maintain their investment plans when it matters most.

ETF Due Diligence Made Easy

If you want to learn more about which metrics investors should use to compare ETFs and why, I'll be hosting a free educational webinar, "Pick This, Not That! How To Compare ETFs," next Thursday, April 2 at 2 p.m. ET.

I'll start by examining the latest research into how investors and advisors choose their portfolio holdings; for example, you might be surprised to learn what inspires advisors to take risks on lesser-known ETFs (I know I was).

Then we'll discuss some due diligence best practices. I'll lay out which evaluation criteria make sense for which investment objectives, a discussion informed by hundreds of conversations with investors and advisors just like you.

Head-To-Head ETF Comparisons

But what I'm most excited about is the chance to live-demo our new ETF Comparison Tool for several potential-use cases. Are you looking for long-term asset allocation vehicles, or to speculate on a given industry or sector theme? Are you attempting a tax-loss harvesting strategy? We'll cover it all.

Investing is full of tough decisions. Now more than ever, we wanted to make the job of picking the right ETF as easy as possible. That's why our ETF Comparison Tool puts the data you need right at your fingertips, so you can make informed decisions about your portfolio and navigate this unique moment with clarity and confidence. Once you see it in action, we think you'll be as excited about it as we are.

(For more on this topic, please join us on Thursday, April 2 at 2 p.m. ET for our free webinar: "Pick This, Not That! How To Compare ETFs.")

Contact Lara Crigger at [email protected]

Lara Crigger is a former staff writer for and ETF Report.