Fund Hot News

There was a time when financial advisors all agreed on one thing: invest in no-load mutual funds. These days, however, you don’t hear much about those anymore but you do hear a lot about exchange-traded funds or ETFs. While mutual funds continue to be popular, they cannot match the growth in popularity of ETFs. What’s the difference between the two and why pick one over the other?

ETFs are like mutual funds in that they pool investment resources and usually spread them out over a variety of investments. ETFs, however, are designed to be traded like stocks. ETFs can be traded anytime the market is open and their prices will change during that time. Collective investment schemes are priced only at the end of the day and that is the only time they can be bought and sold. ETFs may be sold short and bought on margin; mutual funds cannot. ETFs have no management fees and usually have lower expenses too. Continue reading ‘Exchange Traded Funds Versus Mutual Funds’ »

With the economy going through questionable times, everyone is searching for the best place to save and invest. When the market gets volatile, investors want to research their options. I am opposed to jumping ship too soon, but I still encourage educated decisions.

Clients have been asking for more information on exchange-traded funds. Exchange-traded funds (or ETFs) are still relatively new investment products. They were first introduced in 1993, but have been gaining in popularity ever since.

What is an ETF?

The best way to describe an ETF is a mutual fund that trades on the stock market. An ETF owns many different stocks and attempts to mirror an index, such as the S&P 500. There are many different companies and indexes available, so owning ETFs will not impact your ability to properly diversify. There are also ETFs available for fixed income classes, or bonds. Continue reading ‘What Are Exchange-Traded Funds?’ »

This article considers what advantages and disadvantages ETFs offer the individual investor, and what other factors the individual investor should consider prior to making an ETF investment.

Advantages of exchange traded funds

ETFs offer the private investor a number of advantages. These include:

Market access:

As above, ETFs give investors unprecedented exposure to international stock markets, as they span nearly every available indexed equity class.

Cost:

ETFs are a cheap, efficient and direct means for investors to get exposure to equity markets. An ETF investment typically has low transaction costs (avoiding front-end charges, early redemption penalties or exit charges, and high service charges) and can be tax efficient.

Flexibility:

ETFs offer great flexibility for the individual investor, who is now no longer faced simply with the binary choice between direct stock ownership and diversification via mutual funds. The individual investor can trade in ETFs regularly, and can use ETFs in a variety of different ways. Continue reading ‘ETF Investment – What Are the Advantages and Disadvantages?’ »