One of the key advantages to ETFs is their low expenses; especially compared to actively managed mutual funds. The high volume ETFs that mirror major domestic market indexes from Russell to S&P have expenses from 11 to 30 basis points.
John Christy, editor of the Forbes International Report, points out that these economic advantages are not always present with international and emerging market ETFs. "I can’t see why on earth I should pay Barclays and additional 60 basis points…to wrap them (a group of stocks) into a package for me."
John makes some great points and hopefully some of the ETF providers are listening. In some cases there are global ETFs with 3-5 stocks that makeup over 2/3 of the portfolio. C’mon.
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.