Exchange traded funds (ETFs) are slowly but surely cracking their way into the mainstream as more advisors than ever begin to realize their benefits.
Olivier Ludwig for Index Universe explains that dome of the conversations he’s had or heard at investment firms used to center around mutual funds as a core holding of a portfolio, with an ETF or two mixed in for good measure.
Lately, he has heard the tables turn. Now many portfolios and ideas are centering around a broad based ETF as the anchor of an investment strategy. [In an Opaque Investment World, ETFs Are a Ray of Light.]
We certainly saw the benefit in using ETFs for our own clients’ portfolios. The transparency, ease of buying and selling and relative low cost just can’t be beat.
It will take more time to convince the masses that the less expensive broad-based index ETFs, on average, will have higher returns over time than more expensive actively managed mutual funds. But as they trickle into the mainstream it may be a perfect time to get on board. [Where Is the Bottom on ETF Fees?]
Tisha Guerrero contributed to this article.
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.