The bottom line from Morningstar is "ETFs can be a smart way to invest, but they’re only as smart as the people who use them." Brilliant.
Following the mutual fund scandals and lack of performance by the vast majority of actively managed mutual funds, ETFs have become a huge threat to mutual fund companies. Although ETFs only represent 4% of all mutual fund assets, they are growing at a feverish clip.
Morningstar will soon face a dilemma. Their bread and butter comes from investors looking for research on mutual funds and from the mutual fund companies themselves. But if they remain objective, they will have to answer the question, "Why would you want to own a mutual fund when you can buy an ETF?"
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.