A track record of at least 3 years is another indicator of how well the fund does what it intends. Tracking error and overall performance in varied markets is key to understanding when certain funds are slated to perform more efficiently. [How to Measure an ETF’s Yield]
Besides researching performance and expenses, know what stocks the fund holds. This can help investors avoid over exposure to a certain sector or stock and also gives them more understanding of what they are investing in.
Tisha Guerrero contributed to this article.