The need for in-depth, and easy to access exchange traded fund information has never been more important. The business is rapidly growing and the products are constantly morphing, so demand for investor education is strong.
Advisors “need to look under the hood,” Eric Biegeleisen, director of research at Charles Schwab’s Windhaven Investment Management said during a session at the Morningstar Investment Conference in Chicago on Thursday. “You have to understand why every stock and bond is in there.” [If You Don’t Understand How an ETF Works, Don’t Buy It]
The logic and process of how an ETF works is imperative to understanding the funds. Investors need to be aware that even though a handful of ETFs are tracking or aiming at a specific asset class, the performance and outcome can be very different, reports Brett Chase for Financial Planning.
According to Index Universe, new ETF assets were at $119 billion for the year of 2011. Morningstar estimates that mutual funds saw new asset inflows of $58.8 billion over the same time period. The growth in the ETF industry is not stagnating, creating the need for further education in this growing investment platform. [An All-Seasons Model ETF Portfolio]