ETF Trends
ETF Trends

Did you know that even if you don’t directly invest in an exchange traded fund (ETF), you could still be owning one?

Many traditional mutual funds are investing substantial assets into ETFs. To be clear, these are not the funds of funds that have a direct strategy of investing in other funds. They are actually the actively managed funds that investors pay a manager to hand-pick the stocks, reports Eleanore Laise for The Wall Street Journal.

A number of mutual fund managers are attracted to ETFs because they provide an easy route to put money to work, directly into the market.

Word to the wise: the funds holding ETFs are affecting the fees that you pay because they charge layers of fees with little active management. Check the prospectus, as they are required to list "acquired" fund expenses. Also consider that some funds-within-funds managers are finding the strategy doesn’t always pan out as anticipated.

With that in mind, why not save yourself some money and mystery, skip the mutual fund middleman, and invest directly in ETFs?

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.