I’m Keith DeGreen and this is your Investors Minute
Most exchange-traded funds in the nearly $2 trillion ETF market track indexes such as the S&P 500. Some actively-managed ETFs, in which a manager or team makes decisions about asset allocation, have gotten the green light from the SEC.
But are these a good idea?
Much of the growth in ETFs has come at the expense of traditional under- performing mutual funds managed by stock or bond pickers. Through the first nine months of this year, traditional U.S. mutual funds that invest in developed countries took in $53 billion in assets — a figure dwarfed by the
$127 billion that flowed into passive ETFs.
An actively-managed ETF is nothing more than a mutual fund in a different wrapper. They are typically more expensive than traditional ETFs, and are also typically no more effective.
My advice? Beware and avoid!
FEE-ONLY DeGreen Capital Management. Pioneers in low-cost exchange-traded fund investing. Irvine: 949-333-4550. Scottsdale: 480-609-9900. www.DeGreen.com. Minimum portfolio requirement $1,000,000.
©DeGreen Capital Management LLC. All rights reserved.