Worth Magazine reached out to us in response to reader’s interest in exchange traded funds (ETFs).  In the July issue, our article, Spinning the SPDRs, addresses the growing popularity of ETFs and takes a look at new indexing strategies used for many of the newer ETFs.  There is much speculation on when an active ETF will come to market.  When they do, the question remains – will they cease being an ETF?  There are certain conditions that must be met for an ETF to be an ETF.

1. There must be a highly disciplined set of criteria for stocks to qualify for the index – no wiggle room allowed;
2. Transparency is key.  Investors should be able to find out what is in the ETF at any point of time, no waiting for a quarterly report.
3. Management fees should not be more than 75 basis points.

You can read the full article by clicking here.