ETF Investing: Not Every Idea Deserves A Name
Over the last 10 years we have been fortunate to have an abundance of great investable ideas. We have seen many new low and reasonably priced mutual funds, but the majority of the growth has come from exchange traded funds.
While at launch there were only a few etf sponsors, over the last few years the landscape has changed dramatically to one which is diversely filled with sponsors from various corners of
the investment world including mutual fund sponsors such as Janus Funds and Fidelity.
The question now becomes… as the doors have opened up and provide a myriad of choices, is that a good thing?
While ETFs have historically enjoyed and even promoted their liquidity and transparency, we now have numerous ETFs that barely trade any shares, trade proprietary indexes and have high fees. We have previously written about such funds on Seeking Alpha, including the latest example, HIPS – The Master Income ETF, in the article titlted “HIPS: Not Every Idea Deserves A Name“
The next time you are considering ETF investments, make sure you remind yourself that not all ETFs are equal and that now the market is littered with numerous truly mediocre investments.
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