I’m Keith DeGreen and this is your Investors Minute.
One of the great advantages of ETFs is their transparency. Unlike actively- managed mutual funds, you always know exactly what securities your index- tracking ETF holds.
Last week the SEC struck a blow for ETF investors against “non-transparent ETFs”.
BlackRock is the world’s largest fund manager, with $4.3 trillion in assets.
In September, Blackrock submitted for SEC approval an ETF that would have kept its holdings hidden from investors. They feared that daily disclosure would allow other investors to copy their strategy.
The point is that ETFs should have no strategy. They should provide a transparent means of tracking the markets and sectors that your strategy indicates are best for you. Otherwise, they’re just another secretive, actively- managed fund.
Congrats to the SEC for helping to maintain the central – transparent – purpose of ETFs.
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