Some retired investors have been hesitant about adopting exchange traded funds because of the investment charges fees. However, one should weigh the benefits against the potential costs first.

ETFs can become a vital component of an retirement investment strategy, writes Mike Sorrentino for MarketWatch.

The industry has crafted a range of new strategies that allow retirees to create diversified portfolios with less volatility and diminished exposure to unnecessary risks. However, like traditional open-end mutual funds, ETFs charge a fee to invest in the packaged product.

While some investors may be put off by the fees and turn to investing in individual securities, one should ask what ETFs can provide in exchange for an annual cost.

For instance, Sorrentino pointed to ETFs’ beneficial attributes like diversification, liquidity and asset allocation. [Advisors, Retail Investors Seen Boosting use of ETFs]

When building an investment portfolio, investors should be diversified. An investor can meticulously pick out individual securities to fill out their fixed-income and equity portfolios. Alternatively, an investor could choose a few ETFs to gain exposure to hundreds if not thousands of securities. [Efficiently Save Toward Retirement with Cheap ETFs]