Individual investors and Wall St. are turning to ETFs for a variety of reasons. One key reason is the ability to sell during the trading day, not waiting until the day’s closing price. After a new report about mutual fund pricing, ETFs just became that much more attractive.

The New York Times reported that a new study conducted by Harvard professors found that funds routinely calculate their net asset values with day-old holdings. This implies that long-term shareholders seem to get the short end of the stick. When T+1 artificially inflates a fund’s value, buy-and-hold investors are in effect subsidizing the shareholders who cash out. When the value is understated, on the other hand, it is the new investors buying shares who are getting the subsidy.

The bottom line is that shareholders can be affected significantly on days where there are large advances and declines.