First of all, thanks to Murray for writing that excellent little history of the Boglehead/Diehard dispute (though apparently Rob Bennett disagrees). I've spent a bit of time on that forum myself and I love it. There's a passion and a quality there that is a rare thing in cyberspace. So I'm actually excited that we will likely be pulled a bit in the Bogleheads'/Diehards' direction. To be honest, I know very little of the politics and feuds of that board, but I certainly remembered us having the same back in my old indexfunds.com days. And a couple of the primary instigators—Larry Swedroe and Richard Ferri—are still around and active on the Bogleheads' forum, and on this site as well.

If you want to get a taste for what I'm talking about, check out Murray's article here and scroll down to read all of the fiery comments below it, including a number of posts from people who have clearly been around the Diehards/Bogleheads forums for a long time. Make sure you go to page 2 of the article to view all of the comments.

I love the bit of spark on the site, but I can tell that not all the Bogleheads enjoy this kind of sniping. My experience is that mainly that site is about sharing good information and providing an open forum for ideas around index investing. They've got something special going on there, and clearly it's a great resource, particularly for do-it-yourself indexers.

In any case, thanks Murray, and welcome, Bogleheads who don't already know us, to the IndexUniverse.

Now on to Matt Hougan.

It warrants a blog of its own, so maybe I'll revert to that later this week, but oddly (since I'm usually the one with the righteous indexing principles around here), I find myself disagreeing with Matt on ETF values. I think he's confusing product structure with investment philosophy. Don't get me wrong, I am with him in terms of what I look for in my own investment products and in terms of what is better with investors.

But I think it's an odd exercise to try to exclude certain kinds of products from the entire ETF structure. Thank goodness the mutual fund structure, with the reverse situation, was not able to exclude low-cost index funds. Can we say to product issuers that if they don't meet the Hougan criteria, we won't like them, or they might damage the reputation of ETFs, or they'll be in a fruitless battle of having to sell inferior products? Yes we can. But I think market forces will take care of that—despite all the madness in the financial services business, I do think that money gravitates toward quality, which is why actively managed funds look more and more like index funds (lower fees, more diversification, less volatility) every year.

Indeed, I think this dynamic is even more true for ETFs, because despite their low-cost, tax-efficient structure, which theoretically should allow for greater product margins, ETFs do NOT have the distribution advantages (loads, captive mailing lists, 401(k) platforms) that traditional mutual funds have. With ETFs, you really need to build even greater scale to effectively sell funds.

So, I think Matt has put together a great laundry list for where the quality side of the industry needs to go in terms of focus, but he's confused product structure with quality investment management philosophy.