Why ETF investing is smarter than stock picking
ETF investing has rapidly gained popularity in recent years. Globally, by the end of February 2025, no less than $15.50 trillion was parked in ETFs — a new record according to research firm ETFGI.* Why are more and more investors shifting from individual stocks to broadly diversified funds? The main reason is performance. According to the SPIVA Europe Scorecard, over the past ten years, an average of 93 percent of actively managed equity funds underperformed their benchmark index.**
Add to that the lower costs, automatic diversification, and the convenience of a single transaction, and it becomes clear why stock picking often loses out in the long run. In this article, you'll discover how ETFs reduce risk, why the search for the perfect stock is risky, and which historical data convincingly proves this.