Lump Sum vs Dollar-Cost Averaging: A Study on ETFs and Funds

In the Quantlake DCA Study, with a sum already in hand, investing it at once ended ahead of spreading it over twelve months in 69% of starting months, averaged across 90 ETFs and measured five years later. In the median ETF's median start, spreading cost 3.2% of final wealth and cut the deepest dip of the first year from 5.6% to 2.7%.

Quantlake DCA Study · data through 31 August 2026 · updated 27 September 2026 · refreshed monthly

If you have a sum to invest, the choice is between investing it all at once and phasing it in over several months.

One sum: invest it at once, or spread it out?

The sum here is already in hand: an inheritance, a bonus, the sale of a house. Spreading it means dollar-cost averaging over a short period, investing equal amounts at regular intervals regardless of what the market is doing.

The full amount is either invested on day one or split into equal parts invested at the start of each month for 6, 12, 24, or 36 months, with uninvested cash held in Treasury bills less 10 basis points. Both paths are compared five and ten years after day one for every starting month across 90 ETFs since 1993 or launch and 28 long-history mutual funds.

Each fund is summarized across its own starting months first. A share such as "69% of starting months" is the average of those fund-level shares. A "typical" figure is the median of the fund medians, so no single fund dominates the result.

The trade-off

• Invest at once: every dollar is exposed from day one, both to the market's return and to any decline that begins the next week.
• Spread it out: less capital is exposed to an early decline, and uninvested cash earns Treasury bills instead of the fund.

The rest of this page puts sizes on both sides.

What this study shows

• Investing at once finished ahead more often at every length tested. Against six months of spreading it came out in front in 67% of starting months, and against thirty-six months in 77%.
• Spreading cut the early loss and reduced final wealth. Twelve months of spreading took the median deepest first-year drawdown from 5.6% to 2.7% and cut final wealth after five years by 3.2%. Each additional year of spreading removed less loss and cost more wealth.
• Commodities were the exception, across 5 funds. Spreading added +1.08% there, where fund returns barely cleared the cash yield on uninvested balances.

Is a lump sum better than dollar-cost averaging?

At every length investing at once was ahead in most starting months, and against twelve months of spreading it was ahead in most starting months of 96% of the ETFs taken one by one. The longer the spreading, the more often it lost, because more of the money waited longer.

A 69% share is a frequency across past starting months, not a probability for one investor. One investor with one sum gets one starting month, and that month may be any of them.

Investing income as it arrives rather than spreading a sum is the other question: what 90 ETFs and 28 funds show about monthly investing.

What spreading costs

In the typical start, spreading over six months cost 1.9% of final wealth five years later. Over thirty-six months, the cost was 8.3%. Measured ten years on instead of five, twelve months of spreading cost 3.2%.

That range is wide. Over twelve months, the median ETF's worst tenth of starts cost 11.7% or more, and its best tenth gained 7.1% or more.

The cost is the gap between what the funds earned and what the waiting cash earned. Through August 2026, the median ETF returned 7.7% a year and Treasury bills returned 1.7%; all 90 ETFs beat the bills.

What spreading buys

Invested at once, the deepest dip of the first year was 5.6% in the median start, and 27.1% or more in one start in ten. Spread over twelve months, the one-in-ten figure fell to 15.4%. In the typical start, spread over six months, the deepest dip was 4.3%. Over twelve months, it was 2.7%. Over thirty-six months, it was 0.7%. Spreading is insurance against an early loss, and each point of cover costs more the longer it runs: 1.1% of final wealth per point of first-year loss removed in the first year of spreading, 1.6% in the second, and 5.2% in the third.

Each extra year of spreading removed less of the early loss and gave up more market exposure to do it. Most of the protection is bought in the first year.

What this comparison assumes

Both sides of the table assume the money stays in the fund for the whole five years. Nothing here prices what happens when it does not.

The costs it does price are close in size. Spreading over twelve months cost 3.2% of final wealth in the typical start. The same study, on monthly plans rather than lump sums, priced one departure from a plan: stopping purchases in a fall and restarting only at the old high ended 2.4% to 2.8% of final wealth behind stopping for as long on random dates.

That 3.2% is the price of taking the deepest first-year dip from 5.6% to 2.7%. What settles whether it is worth paying is what the holder of the sum does in the first year, and no figure in this study measures that. Why a first-year loss changes what an investor does is the subject of Why Investors Choose Dollar-Cost Averaging.

By asset class

The 90 ETFs split into 7 asset classes, as defined on the methodology page. 58 are equity funds. Fixed income holds bonds whose main risk is interest rates: Treasury, TIPS, mortgage, municipal, and aggregate. Credit holds bonds whose main risk is the borrower: corporate, high-yield, emerging-market, and preferred.

Then commodities, real estate, multi-asset allocation funds, and alternatives, a managed-futures fund (DBMF) and a long/short equity fund (FTLS). Twelve months of spreading, five years on:

Equities followed the overall pattern: at once ahead in 69% of starts, with the median start's deepest first-year dip falling from 7.2% to 3.5% when spread. In every class but one, investing at once ended ahead in 69% to 81% of starting months.

Commodities were the exception. Investing at once led in only 48% of starts there, and spreading gained +1.08%. The reason is in the returns: the 5 commodity ETFs, CPER (Copper), DBA (Agriculture Basket), GLD (Gold), PDBC (Broad Commodities), and SLV (Silver), returned a median 4.4% a year over their histories, against 1.7% for the Treasury bills the waiting money earned, so holding money back cost little. That rests on 5 funds, against 58 equity funds, and is the thinnest row in the table.

Method and limits

• Universe. The Quantlake ETF Universe: 90 US-listed ETFs, priced from 1993 or their launch. 58 are equity funds, US and international, broad, sector, country, factor, and dividend (SPY, QQQ, VTI, IWM, EFA, VEA, VWO among them); 12 hold Treasury, TIPS, mortgage, municipal, or aggregate bonds (AGG, IEF, TLT, TIP); 7 hold corporate, high-yield, emerging-market, or preferred debt (LQD, HYG, EMB); 5 are commodity funds (CPER, DBA, GLD, PDBC, SLV); 3 real estate, 3 multi-asset, and 2 alternatives. All but 3 (DBMF, FTLS, JEPI) track an index. Beside them, 28 US mutual funds priced from 1979, 25 of them Vanguard funds. The methodology page lists every fund, the selection rules, and what was left out.
• Mechanics. Purchases on the first trading day of each month, at the open for ETFs and at the day's net asset value for mutual funds, with a 1 basis point spread; waiting money in Treasury bills less 10 basis points, so spreading earned more in years of high interest rates.
• Regret measure. The deepest paper loss during the first year, on the whole sum, invested and waiting parts together, for each starting month. The pages quote it for the median start and for the one-in-ten start, since the median alone describes a quiet year.
• Overlap and survivorship. Starting months a month apart share most of their history; every fund here exists today.
• Taxes are not modelled. Taxes on dividends and on sales are left out of every figure. Depending on the account and the country, they can change the final outcome.

Frequently asked questions

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