May 12, 2008 at 6:00 am by Tom Lydon
If you are too timid to try your luck with an exchange traded fund (ETF) but have heard about all of their benefits, there are now funds-of-ETFs to quell your curiosity while giving you a taste.
It is fair to say that ETFs are generally less expensive than their mutual fund counterparts, more tax efficient and can be flexibly traded throughout the day. But for those of you who still need convincing, many mutual funds offer ETFs within their funds.
Joanne Von Alroth for Investor’s Business Daily reports that these funds, when they were first launched, didn’t seem to have a clear goal and that doomed them. One of the earliest of their type closed in 2004.
AdvisorOne Amerigo (CLSAX) and the 3-month-old Aston/Smart Allocation are no-loads with expense ratios under 1.5%. Investors are required to dole out 2.27% of assets a year for expenses and foot the underlying ETF fees.
Wouldn’t it just be easier and more efficient to invest in a broad-based ETF, and save yourself some management fees?
